BABOYOT w/ Kelley Scanlin of Pure Simple Foods
(Listen on Apple or Spotify. Full transcript below.)
Can you build a CPG brand without chasing unicorn status?
Kelley Scanlin, founder of Pure Simple Foods (parent to Lark-Ellen Farm and Purely Sprouted), shares how she grew from farmer's market beginnings to operating a state-of-the-art manufacturing facility—all while refusing to compromise on quality.
Sarah and Kelley dig into the strategic path most founders overlook, exploring:
Why regional growth beats racing for national distribution
How mission and values guide major business decisions (including which distributors to work with)
The evolution from founder to CEO and knowing your end game from day one
Why slow, intentional scaling protects quality and profitability
The reality check every founder needs: you don't have to be the next RX Bar
Building with strategy first—not just hoping for viral growth
Kelley's honest perspective on defining success differently offers a refreshing alternative to the "grow fast, exit big" narrative. This conversation redefines what CPG success can look like when you build on your own terms.
___________________________________________________________________________________________________________________________
Episode Timeline
00:00 Podcast Updates and Member Highlights
07:00 Introduction to Kelly Scanlon and Pure Simple Foods
10:38 Kelly's Journey into the Food Industry
14:27 The Evolution of Kelly's Business Vision
23:33 Funding and Shareholder Dynamics
29:18 Scaling Responsibly in the Food Industry
31:58 Strategic Financial Management for Manufacturers
36:46 The Importance of Private Label Products
41:47 Building Financial Models for Success
47:21 The Journey from Farmers Market to Retail
51:16 Navigating Distribution Strategies
57:13 Finding Your Unique Path in the Food Industry
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, Stier. Hey, Chelsea. Hey, Sarah. So listeners, today we have a brand new BABOYOT episode for you. You're actually going to hear Sarah's conversation with Kelley Scanlin, who is the founder and CEO of Pure Simple Foods. But before we get to that conversation, we have an update for you and
I also want to do another member highlight here on the podcast. exciting. I love that. Yeah. So Sarah, I know that you talked about this in a newsletter recently, but I wanted to make sure that we had the chance to share with everyone listening as well that we have made the decision to keep the podcast bi-weekly through the end of the year. Yeah.
We have a lot going on here. think it was like just two episodes ago, we announced that we're coming back from summer vacation and you said it yourself, while we still have a lot going on, we typically go back to weekly episodes in the fall. But as I was approaching that and thinking about what all the team, not just myself, but the team as a whole has to do to essentially relaunch our business, right? When you think about it, it's a lot.
we've got a rebrand that's still underway. We've got a brand new website that's launching very, very soon. And we've got financial strategy software that's currently in beta testing as we're recording this. And we also hope to be launching within the next couple of weeks. And this podcast is valuable to so many people. We hear that on a weekly basis and we are so committed to producing this podcast and putting it out there, but we're also committed to doing a really good job with it and not just, you know,
putting something out there for the sake of having an episode. So as the leader of this organization, I listened to what my gut was telling me. I sat down and really thought about what makes the most sense. How do we do the most number of things well? And that looked like just maintaining that bi-weekly podcast schedule through the end of the year. We see our listenership is still solid. We know that there's still value for all of you guys. And so
it just feels like the right thing to do in an easy way to get a little bit of time kind of back, if you will, to continue focusing on this relaunch. And then in the new year, we expect things to calm down, quiet down a little bit, get a little bit more, you know, back to business as usual. And we'll bring the episodes back to weekly at that point. Yeah. And I also want to make it very clear that even though we are going bi-weekly, each of the episodes that we have planned for the rest of this year are
as we like to call them juicy, good, exciting episodes. think, why don't we tease them a little bit actually? Yeah. So we have, like I said, this episode with Kelley Scanlin, this is a BABOYOT episode. I know that we have an episode coming up where we're going to be talking about some of the things that like we've learned and heard from our beta testers throughout the beta testing period. We have
at least one more BABOYOT episode coming up that is going to be, I think, a very, very exciting one. And as we teased earlier this season, we have a financial audit episode coming up, which will be the first of its kind. And I'm very excited for you all to hear that one as well. Yeah, we're recording that one really, really soon. So I'm also excited about that one.
Yeah, so some exciting stuff coming up. And as we've also talked about here, you know, in the past couple episodes, Sarah, our membership continues to grow. We continue to see new members every month and we've got some new highlights to do here on the podcast. So I'd love to get into that. Yeah, let's do it. So today we are highlighting our member, Shane O'Donnell of Heartwood Mushrooms.
Heartwood Mushrooms is a sustainable mycology brand based in Little Current, Ontario, Canada. One of a couple Canadian founders that have joined us in the membership, so super exciting. They specialize in high quality mushroom products like grow kits, mushroom-based spice blends, and dried CPG. They focus on education, innovation,
and community through hands-on and virtual workshops that empower people to explore fungi's potential for health, cuisine, and environment. And Shane actually shared a little bit more with me about what they do with these workshops and how they are innovating through their R &D practices.
And it all seems really cool. They're involved in their local public school system and their workshops have been aligned into the local public schools. And then they're, as I said, doing some R &D and finding how to utilize the mycelium to basically create recycled products that people can use in their home. Yeah, it's very cool. So he shared with me that
Their mission at Heartwood Mushrooms is to make people healthier and happier using fungi, part delicious food, part engaging education, and part inspiring R &D. I love it. And Shane has been, he's a very recent member just joining as we're recording this in the past couple of weeks and loved getting a message from him that said, hey, I want to be a part of your software beta testing. I have a background.
in software development, you know, would love to do it. And of course I was like, yes, please. The whole point of beta testing is to get the best possible feedback that we can and having someone, you know, as a part of the beta testers who has kind of done this before was something that was really exciting for us. And he has been, as all of our beta testers have been, a benefit to this process. So insightful, so helpful. And it's just been a pleasure to get to know him over the
past couple of weeks and also to get to know his business. So thank you, Shane, for supporting our work, for being a part of our community, and for all of your support in getting this software launched in its best possible version. Yeah. And if you're listening and you want to learn more about heartwood mushrooms, you can go to their website at heartwoodmushrooms.ca. That's H-E-A-R-T-W-O-O-D mushrooms.ca.
Okay, Sarah, so let's talk about Kelley Scanlin. my gosh, Chelsea. You never know exactly what to expect when you're about to go into a BABOYOT episode. We do a questionnaire with our BABOYOT beforehand to make sure that I've got a good sort of meaty list of questions to ask and ways to kick off the conversation. But from there, you never really know where it's going to go and what you're going to learn. And I have to tell you that I did not want my conversation with Kelley
to end, so much so that I invited her back already at the end of the episode. She's the founder of Pure Simple Foods, as you mentioned at the top of the episode, which is the parent company of emerging CPG brands Lark-Ellen Farm and Purely Sprouted. Now, Lark-Ellen Farm was her first brand that started at a local farmer's market and has since grown into two nationally recognized brands.
supported by an industry certified manufacturing facility. Now this growth has happened since 2015, right? When Lark Allen launched and as CEO in that time, Kelley has built a state of the art factory, scaled a high performing team, championed a business ethos, which we talk a lot about that is defined by integrity, transparency and an unwavering commitment to quality, even when that requires the harder path.
Her mission since day one has been to create food that nourishes and heals rather than harms. And I think one of the through lines in this episode is how her mission and ethos has truly informed the decisions that she has made as a founder. So we talk a lot about that. We talk about the early days, of course, like so many female founders, she was a mom, right? Life didn't always look.
perfect personally as she's getting this business launched. And I think that's something that's so, so many women can relate to. She also talks about why she has two brands, which is not something that I generally recommend for CPG founders, but she talks about why it aligns with her ESOS and why that decision made sense. And something that I know you really like to hear about in the episode Chelsea based on our conversations that we've had offline is her evolution from
sort of founder to CEO, right? The true evolution and what that looks like for her. Yeah, I thought she had really interesting things to say about kind of knowing where you're going, right, at the beginning and how that impacted or informed her evolution as well. And I thought that was a very, very interesting part of the conversation. Yeah, and I think the other thing that's interesting, and I know that I was like,
wanting to dig in more about during our conversation was her relationship and experience with distributors, having started with regional distribution, having moved into some national distributor relationships, and then where those relationships are now, and again, how her ethos and her mission and values are guiding some of those decisions. I think this is one of my favorite BABOYOT episodes of all time, and I am just so excited for our listeners.
to learn from Kelley and eventually, you know, hopefully get to meet Kelley inside of our membership because we would absolutely love to have her back. definitely. All right. Well, Sarah, what do you say we take a quick break and then jump into your conversation? Yeah, let's do it. Over 70 % of early stage food brands fail due to cash flow issues, incorrect pricing and thin margins. The Good Food CFO breaks through that noise.
Partnering with founders from pre-revenue through their first million in sales, we have created a first of its kind financial software that is designed to teach you to understand your numbers, price for profit, and make confident financial decisions that support long-term sustainability. The Good Food CFO's proven framework is helping good food businesses thrive. Your business is next.
For a limited time, you can head to the goodfoodcfo.com and join the wait list to receive 50 % off your first month's subscription. Now back to the show. Well, Kelley, welcome to the podcast.
Thank you, I'm thrilled to be here and so proud to be part of something that you've created to help founders and others learn more about the food industry.
Well, we're so excited to have you here and I would love to kick things off by just taking a couple moments for you to share how you got into food, what prompted you to start your business, and what does the business look like today?
Well, it's a story that you've probably heard before. had no at all experience in food. I actually started my career in telecommunications and was in marketing and sales for AT &T and retired when I had kids. After divorce, I found myself back in the small town that I grew up in. And I was now a single mom and had two kids and figuring out what I was doing with my life.
I started having some inflammation in my joints. And so I turned to food to find out if there was something that I was eating that might be inflaming my body and my joints. And it was when paleo diet was just starting. And so there was a lot of just new information around nutrition. And I had a personal trainer at the time and she said, you know, there's a new program called the whole 30.
where you eliminate foods for 30 days, all the good stuff, the wine, the sugar, the cheese. Then you see how you feel, start adding foods back in. And through this whole process, I learned that grains were inflammatory largely for my body, but I loved breakfast. So I turned to my kitchen where I started making granolas out of just nuts and seeds.
And I started learning more and more about nutrition, about sprouting, which is something we can talk about, but it is what my company is known for. And I made these granolas out of sprouted nuts and seeds. And I just started going to our farmer's market. I have this really sweet town that I live in and it has a really lovely Sunday farmer's market. So my kids and I would just go down and pitch up our farmer's market tent and sell these granolas. that's really how we got started.
What year was that, may I ask?
think the first tent we pitched was in the first part of 2015. So this is our 10 year anniversary. It was a really interesting time and really just a humble, just organic time of just me trying to figure out how to feed my children, how to take care of myself and just being at the farmer's market, being part of a community. And we had a forager from Whole Foods come by, an amazing woman by the name of Monica.
Amazing.
She has been just amazing to me over all the years and to a lot of other women entrepreneurs in the food business. And she helped me get into Whole Foods. And that was really how we got started. And today we are a much more complex business. I'll tell you more about that as we go through, but I ended up starting my own manufacturing company. So not only did we start the brand, we started our own manufacturing company and then
Yeah.
Through the years, we've developed two brands that we have in the two national brands that we have in the market and a private label manufacturing business that I run here in our town where we started.
Yeah, I'll definitely be interested in talking more about that because in our community and in our consulting business, we meet a lot of founders that have that dual business where they have created a brand and through one path or another have the manufacturing facility, right? But a little bit more capacity to support others and to manufacture for them. So that's super interesting. Sure. Yeah. So you mentioned that you've got two national brands and
It's an interesting business for sure.
the manufacturing business. Was that the vision when you launched, were you like, want to have two brands, I want to manufacture for a private label or was it something completely different? I'm always so curious as to how something starts and then how it evolves.
I'm laughing because I wish I had the vision. I'm like, that I've done out to do, but I'm just entrepreneurial. And I remember when I was, after I retired from AT &T and I was home with my kids, my husband used to come home from work and I would say, I thought of this idea for a business. And he's like, I thought you had a deal. So I think for me, was more like, just, love to advance ideas.
forward and I just felt that this was great food that wasn't in the marketplace and they really wanted to share it and I really wanted to find a way to share it. What I didn't know at the time was I knew nothing about grocery. So I didn't understand margin. didn't understand on P &Ls, balance sheets. I didn't understand lean manufacturing. There's so much I didn't understand. I was just
pure will. I want to get this thing forward. The town that I live in is called Ojai and it's a little valley near Santa Barbara and it has really only 8,000 people that live in the town but the valley's about 20,000. But it's amazing all these brands have come out of Ojai like the brand Kavita that is a big kombucha brand that sold to Pepsi for several hundred million dollars.
It started in Ojai and we've had a lot of women founders start these food brands or CPG brands in this little town. And I think I have that in my mind. And I was like, I want to do that. Not really understanding what it all, what I was signing up for.
Yeah. You mentioned, so I like to be transparent with our listeners that we do a little questionnaire just to kind of get some insights into you and your business before we meet. And I can kind of get some ideas on like where I want to dig in and some interesting things. And so I'm going to read just really quickly something that you mentioned. You noted that your vision for the business has evolved, as you just described.
to include standing the test of time through innovation, scaling responsibly, and creating real value for both customers, your team, and shareholders. And when I read that, I was like, I want to know more about your philosophy, how you approach that, how you do that. So maybe we just take it step by step here, but standing the test of time through innovation. I think this is so key.
But how do you, I think my one question is what did innovation look like for you and how do you not abandon your core customer while innovating?
Well, I ended up with two brands, honestly, it's a great question. So when I started at the the farmers market, my my first company is called Lark Ellen Farm and it's named after a little farm that I live on here in Ojai. I created these as I talked about these granolas without goats. They were made with sprouted nuts and seeds and they were organic. My ethos have always been organic. So what I didn't understand was
that's really expensive. There's a reason in this country why food that's cheap is full of crap really, because that's cheap. And when you make something that's truly healing for the body and truly the right ingredients and you make it the right way, it's gonna end up on the shelf really expensive. And what you're gonna run up against is you're gonna run up against a price point
that not a lot of people will pay for in order for you to make your margin. So I always say I created my Lark Ellen products too good because I set my stake in the ground that this is what I stand for. So along the way, we're starting to get requests from consumers saying, we love your sprouted nuts in your granola, can we just buy them? And so we started a sub product line that is just
sprouted nuts and seeds. And we were seeing this enormous demand for those. And so I went to my shareholders and said, we're looking at a lot of demand for these products. And so the granola category is extremely commoditized and extremely competitive. And it's just owned by all the big brands, Kind and Bob's Red Mill and a whole bunch of them.
We said, let's pivot to a bigger category, which we thought was snacks. And so I wanted to correct some of the things that I had done with Lark-Ellen, still make a fabulously healthy brand, which is a part of my ethos, but make it more affordable. And so we innovated a line called Purely Sprouted. And it's a snack line made with our sprouted nuts and seeds. And the idea behind that brand was let's make something
that tastes delicious, but also carries these health benefits and let's make it affordable. And so that's how, through that innovative process is how I ended up with two brands. I didn't feel that putting a non-organic product in the Lark Ellen family was going to resonate with those customers. So we came up with a separate brand. That's a way of explaining how I've used innovation to try and maneuver through this industry.
Yeah, I think when a lot of founders start out and sounds like this is what your experience was, you have the highest standard. It looks like we're going to use glass jars. We are going to source locally, ethically, organic, all of those things. And then you learn the lesson like you did, this is very expensive. And there is a customer for that. But there's also a customer who wants, as you said, the
the healthy ingredient, right? Those sprouted nuts in your case, but they can't hit the price point. They can't make that work for them. So I love that you innovated in a way where you're still aligned, as you said, with your ethos, but you can meet some more customers where they're at. It's speaking to this idea that good food shouldn't be a privilege, right? And be solely for a certain
income level, right? Or that you should have to make really difficult financial choices, whether to feed your family good food or do something else. You don't even mean in your life. So I love that there's this idea of innovation and splitting up the brands rather than saying, we only serve this customer or no, can't, we're going to go away from our ethos and sort of dumb down, you will, Lark Allen Farms.
And this is not to say that everyone listening that should have two brands, we're not saying that, but I do like the innovation that you.
Yeah, there's a lot of challenges to having two brands and sometimes I question the decision, but I think all in all, it gives us a really nice ability to cross the market because Lark Ellen can exist in the high-end natural channel. We have customers that call us and they wanna know what the parts per million of something is in the water that we soak in. But 95 % of America wants something that tastes good that they just don't have to feel guilty about.
and most foods are good enough for them. And so I had a lady one time who challenged me on creating this second brand and she was telling me her opinions. And I said, look, I'm just trying to get people out of like a Dorito. I'm just trying to get them into the next level of eating and feeling your body with something that has real vitamins and came right from nature and is...
you easy on your Tommy and all of these things that can satisfy you. That to me is a huge win. somebody grabs not potato chips, but mine at least once a week. I would say that I don't think you have to be extremists. You don't have to eat a hundred percent. I don't need a hundred percent all the time the way exactly the way I should, but you know, if you replace something part of the time, you know, it's a win.
Yeah, yeah.
Yeah, I agree. I want to touch on, you said you went to your shareholders. And I think with the level of transparency you're comfortable with here, can you talk about how this company was founded and maybe a little bit about if you had some funding if the shareholder… Because not a lot of founders have shareholders. A lot of people listening to this podcast are solo founders and they're really bootstrapping and doing things on their own. So can you talk a little bit about
your shareholders and what that looks like.
Well, I first want to say that I think that I've been talking a lot more and consulting with people. And one of the things that I like to say is that if you're a founder and you've started your food company, that I think you really have to ask the most basic question first. And that is, what is the end game? Because that is the single most important
question that you can answer and shapes every decision that you make. Because if you want, if you end up with shareholders, you, even if you're still a majority owner, you, at least if you're a responsible ethical person, you are going to feel absolutely responsible for getting them a return on that. And so, you know, I can talk about how, how I came into shareholders, but I do just want to make that
because I feel really strongly about that, that you have to know whether you want to operate a company and make it profitable and earn a living off of it and run it, or are you going to try to scale it and exit? And if you're going to scale it and exit unless you have personally millions of dollars or access to millions of dollars, you will be in a position of raising capital.
this industry just eats so much cash and so much capital in its growth that I don't think that you can do it. There's a few unicorns that have been able to do it, that have been able to get growth without capital, but very few can do it. so with that in mind, when I started, it was just me and my family. And I had some help from my family.
but there became a time where it was more than my friends and family were willing to help. And I have to say that part of that was because I was doing the manufacturing and that way there's so many little ways we could go down these roads. But I'll say that when I first started, I tried to go with a co-pack and I went with someone who was recommended to me who I was onboarding with and I had bought some equipment for him.
And I got a call one day on the phone, somebody saying the person you're working with is not who he represents or not. I it's not who he says he is. Anyway, I went through and did some reconnaissance work and found out that I was with somebody who was not only taking me for a ride, but other people for a ride. And I lost like $50,000. And we almost went down then, but we didn't. And we found our way back. But when you're building,
the manufacturing, you don't have the scale to generate enough money to cover your cost of goods. And so in the early days, I was constantly looking for money. And so I went to my local network, people I met at the farmers market and asked them if they wanted to invest. And of course, people would say, but I know this guy and he likes to invest in founders. And so it went and I ended up meeting
somebody who was involved in the Santa Barbara angel group, angel investor group. And they invited me to pitch to the Santa Barbara angels. And I think my first round was I raised $350,000 and I thought, my gosh, that was amazing. And so I started with them and then it became obvious that I was gonna be needing to raise not hundreds of thousands, but more money.
And I did the same thing, networking network. And I ended up with a, I mean, just an amazing investor who really loves to invest in people. And he opened up his network to me and has really been, he's one of my board members today, been a mentor and just an amazing figure. And I'm so lucky because I have so many friends who have raised money with the wrong,
And they're no longer in business. And so it's like dating, you know, have to make sure it works for you and works for them and that you're aligned on where you're trying to take the business.
Yeah.
Yeah. So important. Yeah. Well, thank you for sharing that. think that that's super helpful. as we talk about your business, what you're able to do, how you're approaching things, having some transparency around, yeah, you've got shareholders. You've got some funding, I think is an important thing for folks to know. So thank you for that.
Bill Moses who started Kavita, went to him, well, he was a financier behind Kavita. I went to him early on and had conversation with him. And I remember him looking at me and I know he was just thinking, you know, don't start this. It's too hard, know. But he was looking at me and said, Kelley, you'll never know stress until you take someone else's money. And I have found nothing to be truer. If you're really responsible for that money,
from the second you put it your bank account or cash the check, you instantly know that your life has changed, that you're going to need to get them a return on that investment. They've entrusted you. And that's everything to me.
Yeah. Yeah. With that, you also say that your vision has evolved and includes scaling responsibly. I'm going to go ahead and say that oftentimes when we hear angel investor funding that's more than hundreds of thousands of dollars, that typically involves fast growth, like very fast.
And so I would love to hear what is scaling responsibly look like for your brand and yeah, and how that relates to shareholder expectations because it seems a little abnormal if I might say.
I like to say it's like walking a tightrope, know, because we could have a whole podcast on trying to grow and hit profitability and be profitable or even all at once. you know, it's like those two things are polar opposites and they're constantly tugging at you. I've definitely made mistakes. I would not want to be on here and say I have it all figured out. But I...
I've learned how to sort of do that. And I've gone in like other founders and gone, oh, I got this capital. I'm going to go hire the best broker team. And I'm going to go after all the retailers. And we're going to be in 30,000 doors, whatever. And the capital just goes out and goes out, goes out. And my shareholders always say, get me the growth and I'll give you the money.
but then if you don't get the growth, the money dries up. So you're constantly balancing these two things. And so what I would say is that with me, that I find that what I mean by responsibly is I had to go back and leave ego and even sometimes leave shareholder expectations on the sideline and say, does it matter if I'm an ex retailer?
No, what matters to me is that I'm getting growth and I'm getting a contribution margin. And that in the end is what the investors want. And so I have one investor, he calls me a lot and he says, well, what news do you have for me today? And sometimes it's not what he wants. Like I don't have this big shiny new retail outlet that I say we're working the strategy, we're going deep.
into our strategy and we're getting the top line revenue that you need. And so sometimes it is that reframing and re-educating. The other place is as a manufacturer, we have turned to private label. And one of my investors really didn't like private label. And he said, you you don't get the multiple at the end if you build a private label business.
Yeah.
But what I've tried to hold firm on is that if you use private label and you're a manufacturing company, then it actually helps your brands grow. So the way I like to speak of it is I'm growing my private label business right now and my brands, they're a similar trajectory, but very soon there's coming a point where my brands are gonna go like this and my private label is gonna flatten out. And so private label will have done its job. It will have provided
revenue so that I can properly allocate overhead and labor across a broader base and while I get my brands going and so that's another strategy.
Strategic, yeah. Can we talk for a second about, this is getting a little bit into the weeds, but I can sort of sense some people having these questions and I always like to try to sense it and ask it. So when you have, I assume, tell me if I'm wrong, that you are creating your products and your private label products in the same facility and then you have the same team that is creating both sets of products.
Yes.
How do the do you, this is where it gets in the weeds part, do you really separate those businesses when you're creating say that financial strategy, when you're creating the budget, when you're figuring out how much to charge your clients? How do you, if you can provide any tips, sort of keep that separate while knowing that one is in support of the other? Does that make sense?
Yeah, how do I keep it from an accounting standpoint or just in inventory or?
Any of the above, any of the ways that you have found important, because as I mentioned earlier, there are several folks within our community who are doing this, again, strategically to keep their manufacturing teams busy in, let's say, the off season for whatever produce they might utilize or just in the dips in seasonality in their business.
Yeah, it's critical. Like if you're a manufacturer, I think that it is nearly impossible to get profitable until you're around eight or $10 million. And so if you look, unless you're, I mean, that number will range depending on where you're manufacturing and the cost of labor and, know, cost of goods, but it's very difficult to find a model where you're a brand new manufacturing and you've got enough scale to hit profitability.
And so what I would say there is unless you are just growing like gangbusters and you're doubling year over year, you're gonna have to find some way to spread your overhead and your labor across a broader range of revenue. And private label is perfect for that. They say that by the year 2030, that private label could be as much as 30 % of the total grocery spend in the US.
retailers are looking for people that do private label products. How we separated on the P &L is we have our distributor line and our trade spend. And then we also have up in revenue, we break out private label or any co-packing that we might do. And it carries maybe a lower margin, but it doesn't carry a lower net margin. Because by the time you figure in the trade spend and the
PR and such, I think if I hadn't had my private label, I don't think I'd be in business today. Because it kept the lights on when we had dips in the brands. I my employees employed. It's very stressful when you have employees and they're coming to you going, what work do you have? And we're saying, I don't have any right now. they have families and they have children they have to take care of and parents they have to care for themselves. so that private label,
provides a really great opportunity for them to be able to stay with some consistent work.
Yeah, I love that you're sharing this because there's so much noise and information when you're a founder. I think no matter what industry you're in, oftentimes we hear like, pick a channel and grow in that channel, stay focused. I just shared in a recent newsletter about one of my clients who had three different businesses when I started working with her. There was a through line, but each of the products was quite different. There were different teams. It was a really kind of like
fractional or fractured sort of group of businesses. They all operated really independently. And the difference there, right, is that they couldn't leverage one another, you know what I mean, strategically, as you're describing. And I'm bringing this up because when we hear like, focus on one thing, don't try to grow your brand and be a manufacturer at the same time, I think there's nuance to that, as with so many things, right? Where it's like,
Can this be in support of your primary brand? Can this be in support of your business financially without being a big distraction, without taking away from your ability to focus on your, what I'll call your core brand and core business and growing that. So I think asking those questions is important and structuring things in a way where, okay, yeah, it's helping, right? It's feeding the same, you know, was gonna the same fire, but.
I think you're right. And so smart of you to coach your clients that way. Of course. Uh, I think that when I looked at the business, think that most people, if you ask him, and I was told this, like, I've got my private label business started in 2017. was only a couple of your business and, uh, everybody will tell me, don't do it. You're going to erode your brand, but it's the best thing I ever did. And, and what happened.
what happens is that if you end up making, you can go in different channels. let's say your product is really focused on natural grocers and Whole Foods and Wegmans and your high-end market, you can go find a small, a company that is servicing a lower marketplace, and you can, you put your products there. Somebody else is gonna show up there, whether it's you or somebody else is gonna make it for them, so it might as well be you. And so,
I think you can just choose your channels and figure out a channel strategy that supports you going into private label and to listen to your gut and to read your data. I mean, I think that's what I love so much about this podcast. And what you talk about is that the answers to every question that you have as a CEO or a CFO or somebody running a
food company is the answers in the data. It's in the numbers. You know, should I go to this channel? Should I not go to this channel? Should I do private label? Should I not do private label? The answers are not out there. Their answers are in your P and L, right?
love that. Yes, absolutely. You are speaking my language. Yes. Big, big yes.
Say a good CFO is worth their weight in gold. A good CFO, mean, is worth their weight in gold. It's like when you're first starting out and you don't know financials and you're guessing, you know, the thought of having a CFO or anybody to help you with forecasting is scary because those good people cost money. But if you can find, it's like the one thing that if you go, I could tell any founder is
find somebody, a neighbor, a friend, donate a bunch of product, whatever you have to do to get somebody to build financial models that you can use to make data on. I you can make decisions on.
Yeah, and I think this is a good time for me to plug our software because we built it to meet the need of very early stage brands who struggle to afford or to find someone with CPG experience, right? Because something we were hearing over and over is I have my husband or my wife or my relative is a finance person. They really understand the numbers.
and we gave it a go and because they didn't understand food and they didn't understand the industry, now we need more help, right? And a lot of the software, all of the software that's out there is geared toward, you know, a million dollars in revenue or more, right? It comes with a really high price tag. And so what we're trying to do is just what you described. Help founders create financial forecasts. We're calling them financial scenarios. You can get in there and play with the numbers and have
CFO level guidance and insights into is this a good idea to grow my business this way? What do what do my margins mean, you know, to my cash flow, making decisions like which channel do I grow in, you know, all of those things. And so we're hoping that we can help fill the void of someone who doesn't have someone in their network who can help them out the software and our office hours and stuff will be there to support them at like a very, very affordable price. So
I mean, I would have loved to have known or had that software, you know, when I'm like late at night in my jammers, you know, with my laptop trying to, you know, figure out all this stuff and learn accounting while I'm learning manufacturing and branding and all of those things. And, you know, there probably a lot of mistakes could have been, sort of been avoided had I been able to really look at the numbers. let's face it, most founders are not financial people. They're visionaries.
They're creators. want to do something different in the world. They want to make a difference. They're making different, they're making decisions out of their hearts, not out of a financial spreadsheet. And that's why so many fail because the people that are really done well, honestly, in this business are people have failed and then come back around and started a new brand because they learned all the mistakes. I've been fortunate enough to be able to have opportunities to learn and grow.
you even though I made a lot of early mistakes, but not everybody gets those chances. And so, you know, if you can start with the numbers, you'd be so much farther ahead. And it'll tell you early on what you even have a business. Right? Yeah. You find that.
Yeah.
Yeah. And something that we built into the software too, because it felt so important, is this look into the future of like, when am I going to break even? Is it based on what my plans are here? And we want to get people before they launch. Put your ideas in here, put your product costs in here, calculate your margins, build a scenario. Because if this scenario tells you that you're not going to be profitable according to this plan,
for five years, do you still want to do it? Do you have the money? Do you have the tolerance to take on the debt, to potentially have shareholders? Does this make sense to you or not? Does it not feel great? And then maybe you rethink what that business plan is or what that business model is, right? That's what we want to do is give people the power, the information that they can make really informed decisions and not jump into it and a year or two down the road say, I don't know.
if and when I'm going to make any money doing this. And then you make that critical decision of I'm out when maybe you were on the cusp of getting there, you know what I mean? Or I'm going to keep on going and you don't realize how long and how expensive that road is.
Yeah, how much money you have to raise or have to go, you know, if you grow slowly you just bleed money for years So, you know, there's this there's all these things and you know, you're as a founder and you're starting out You're just trying to make something good. There's there's so many decisions and I look at the company now and I'm so far away from that gal who was in a kitchen just trying to feed her family now It's like it's I come to work and it's not you know, making granola. It's it's it's
looking at my P &L and my balance sheet and managing shareholders and innovating new products and dealing with, you know, average order value and cost of acquisition and, you know, all these things. And if you don't, if that doesn't interest you, then that's another thing that you have to look at because it becomes a business and not just a business.
Yeah, absolutely.
So anyway, I think those are all just such great things for people. had this most lovely gal come talk to me. She was selling at the farmers market and she had these phenomenal tortillas and she really wanted to get in the business of the tortillas. But as we talked through it, we learned that that's not really what she wanted. She wanted to do something to bring good food to people, but not necessarily having a brand.
we talked through it and she went back and she changed her entire model of what she was going to go do to something that supports her lifestyle that she wants. And that's why when I really started the conversation, I always say know what the end goal is, because if you don't want to be tied to a desk, you want to be traveling the world, you know, then, then don't build a company that makes you, you know, tied to the business. And so
That's I think knowing what you want from the business and staying true to that will help you live a more fulfilled life and not get caught in something that you don't want to be in.
Yeah, I love that advice. And I think that applies to whether you're like starting a food business or not, or making that decision of do I want to become a national brand? Do I want to stay, you know, regional or local? And how do I make that work for me financially, right? And my lifestyle. And as you said earlier on in the episode, know your end goal. Do you want this to be a legacy brand? Do you want to, you know what I mean? And there's no wrong answer, right? Because it's your dream, your individual vision.
And I want to talk about your path of going from that mom who was trying to feed their family well to, as you described it, having two national brands. Can you talk a little bit about what the journey from farmers market to bigger retail has looked like for you?
Yeah, yeah, absolutely. Well, I love I had to come to the conclusion at some point. I really like to work. Yeah, I like to use my brain and I love to be challenged with problems. So I guess I thrive in this environment. But even saying that it's been really hard. I mean, it's a really it's just a super taxing. I work really long hours and it gets better when you when you have a team, you know that the company can't be hinged all on you. so
That's one thing I wanted to bring up that kind of ties into this is when you're building early financial models You have to build in Not you being the only person on the salary, you know or you can't not pay yourself because Eventually, you're gonna have to pay someone and you have to have a business that can support salary so like you have to think like
unless you want to do it all yourself all the time, you have to build that model. So you at least have fractional financial resources, marketing sales, because otherwise you're doing everything. And that's really what's been my path is that I have had to do a lot of it myself. And it's been very rewarding because I've done everything here, you know, every job from washing dishes to, you know,
putting together the P &L or whatever, but to raising the money. But I think that if I had to go back in time, I would have built the team out earlier because a company can't survive on just one person doing everything. So with that in mind, I'd say that it just started so it just.
The early days were so fun. It was just really simple. My mom would order the nuts. My mom and dad live here in town. my mom would order the nuts, and she could soak them in her kitchen. And they would dry them on these little dehydrators I bought them. And then my dad would take them to my house. I would make the granola. And then he would come back on Saturday night, pick it up, take it to their house. And they would sit in front of the television and.
I watched TV and I bought them these little scales on they put on their TV trays and they used to fill the bags and then we'd all go to the farmer's market. And then the next thing we knew, we were out growing my kitchen and went into a smaller kitchen. And it was our first kitchen was like 150 square feet. It was tiny. We got into Whole Foods in there. And then I found myself, all of a sudden now we're moving again and now we're in 2200 square feet.
And now we have employees and now we're figuring out payroll and now we're figuring out California and employment laws. And I've never done manufacturing. So how do you manage efficiency? And we can only pack like 300 packages a day. And then they're taking more space and then you're outgrowing that space and then you're going to a new one. And now when I walked into the factory, I looked around and I go, we have about almost, I have 20,000 square feet. We have automated lines.
We do thousands and thousands of pounds of product a day. And it's just weird. It's out of the window.
Yeah, it's like such a long road, but also feels like overnight you suddenly have, you know, this big space. Yeah. Yeah.
My life partner, he's been with me throughout and been amazing. he's helped me really build the facilities and everything. And every time we move into a new space, he's very conservative. And he always says, and he says, you'll never need a bigger place than this. And I always look at him and I go, we'll be outgrowing this in two years. He's like, no, we'll able to stay here forever. We always outgrow it.
So you mentioned the forager from Whole Foods came and you got into Whole Foods. What did the growth look like from there? Did you quickly move into distribution and more retail stores? Can you share a little bit about that?
Absolutely. Yeah. we first got into Whole Foods and that got us into UNFI. But we also went with a regional distributor and they were great. And I actually love regional distributors. And for anybody who's growing their business, I would say like we have a great relationship with UNFI and Kehi.
There's this thing that happens, I think in every industry where you think, I've made it when I get into UNFI or I made it when I get into sprouts. And that's where you have to go back to that original, what you want, because regional distributors and regional brokers are amazing. You know, they, save you a ton of money. They know their customers. They help you sell into accounts and.
I'm actually finding myself going backwards in some cases now, where we're going back to regional brokers and back to regional distributors in certain markets because it just makes financial sense.
Yeah, this is so fascinating. I've been wanting to talk to a founder who has either exclusively grown through regional or I didn't even consider someone who had, you know, been national in some areas and then then flipped back to regional because I think my perception is that there's there's a belief that regional is regional and there is no path to national through a regional network.
Can you talk a little bit about that and to maybe those founders who think, you know, national distributors are the only way to kind of get out of your own neighborhood?
Absolutely. Well, I think that there's a whole network in the US of great regional brokers and distributors. And so what I would say is, again, it goes back to your strategy. you so like, for instance, when I raised some capital a couple of years ago, we decided and we were launching purely sprouted. We decided we were going to go hard into purely sprouted. And so I hired a guy who had
been with a lot of really big brands and had grown them. And I hired a really top-notch brokerage firm. And we went out and bought Market Share. We went everywhere and we got, we paid slotting fees and we got on the shelf. And then we discovered that we put all of our money into getting on self and didn't allocate enough to stay on shelf and to build a community with this brand new brand that just hit the market.
So I've changed everything. I blew everything up. And I said, I'm going back to, and it was really hard because my shareholders and board members were really bought into this strategy that we were gonna go big. And I said, no, we need to come back and we need to go back to basics. We need to pick a region and we need to go deep in that region. We're gonna hire the best positioned,
regional brokers, and we're going to find some nice distributors and we'll also use Unifying Keihi and we're going to go deep. And so when you call me and you ask me, did you get into such and such a chain? I'm going to say no, but I got into 50, know, infrastructure stores, you know, we're going to go deep and build a community and then we can take that and we can go national. But if you're going to go national and you have the budget to go national, then
I think you need to find, think that I can see there where you would want to stay with the bigs and some of the big broker house. But I actually went back and I got rid of, I built an entirely fractional team. have a fractional CFO, I have fractional sales, I have fractional marketing, and I just found great people who really know their stuff. And we just put together very smart,
very strategic plans and we tried to get rid of egos and outside expectations and just said, what do we think is gonna move the needle and let's build our story regionally and then we can take it and grow. And we have a couple of key strategic accounts that we go after that are big, but we don't have national brokers anymore. And so we're just working those individual opportunities and
really trying to build the velocity story. I hope that helps.
Yeah, that really helps. How many states are you in currently across the two brands?
I think we're in all the states. All 50. I'm pretty sure we're in all the states. In one form or another, in an infrastructure or a chain. We're national with Sprouts. Both brands have products national at Sprouts. We've had some things recently on their innovation tables. So yeah, some really great things. And we're also omnichannel. So we're doing some e-commerce and Amazon. But with those again,
There's just so much pressure to do like you'll go to a party and your friends will say, why are you not on TikTok? know, well, can't be on every channel. So, you know, we have to know who our consumer is, where they, what they watch, what they're interested in. And then we have to target that consumer and you have to get rid of all the noise about what everyone tells you should be and just go back to what you know that you need to do. And that is my best advice is like.
There's unicorns like RX bar was a unicorn, right? I mean, they grew fast and furious and had this remarkable packaging and have one of the biggest exits of all time. But, you know, people win the lottery too, but not everybody's going to win the lottery, you know? if you're not the next, unless you're the next RX bar and you see that kind of just amazing growth and you've got the money to do it, then you're going to have to figure something else out and let's be reasonable and honest.
about where your place is going to be in that, in the, how you want to exist if you're not the next, you know, big thing and not very many of the brands are the next big thing.
Yeah. There's only so much room on the national shelves, right? It's one of the ways I like to think about it is, you know, I'm going to use a tortilla chip because of the not so, you know, distant past, you know, siesta acquisition. But, know, there can only be so many tortilla chips on the national shelf, but there can be lots and lots of regional tortilla brands. have,
I know if you heard the episode with Christopher from Benny Blanco Tortillas. mean, he's not trying to grow a national brand. He is trying to be the best in his area. He has a specific target. He's building a financially sustainable and profitable business. He can give back to the community. Right. So it's like, and, and, and there are lots of other tortilla brands that are really great all throughout the country. And the way I like to think of it is.
You don't have to strive to be the next RX bar, right? As we talked about before, you can choose the path that's right for you. You can make money and have whatever kind of impact you want. And lots more people can do it if we're not all trying to be the next big brand in a particular category. So I just.
service that you're sharing that with people and I hope people really hear that and take that to heart because you know the food industry is still made for the big companies. It's made for people that can pay to be on shelf to stay on shelf can give away they have huge manufacturing plants they get great margins they get they buy truckloads and truckloads and they get really good time.
of debt on their balance sheet.
Yeah, exactly. Yeah, exactly. Yeah, so that's sold, even though they're not profitable, know, some big multiple. But I think at the end of the day, yeah, those, if you want to play in that world, that's just, you got to know that's what you're playing in. And everybody else has to figure out what their end game is and what they want in between. And there's a lot of really big opportunities out there now with e-commerce.
And it's fine, you know what mean?
I was talking to a the other day, he his whole brand just selling on Amazon and sold it for a decent amount of money. there's savvies everywhere, but it comes down to strategy. And I've met very many founders that started with a strategic plan. I really think that's what you need to really do it right.
Yeah.
Well, I mean, that feels sort of like a mic drop moment for me of this. I Kelley, there's, feel like we could talk for so much more. had other questions prepped for you that we're simply not going to be able to get to. So I'd love to either have you back here on the podcast or maybe inside of our community to talk directly to founders. think that they, you know, I hear questions about infra coming to my mind. You know, we haven't talked about infra here on the podcast and you you shared.
between you and I, some of your biggest financial lessons in terms of looking at those financials and how to take it all in and use them. And I just think that your honesty, your openness is really lovely. I'm so happy to have met you and to have had you here on the podcast today. yeah, open invitation. Come back and talk to us more, please.
I'd love to, and if there's something that listeners are interested in hearing more about, I'd love to work with people, just free, just to coach. I just really wanna give back and share the lessons that I've learned and help other people realize their dreams. I'm very grateful for the experience that I've had and I wanna hopefully be able to share it with others. So thank you so much. I'm sure we'll talk more off the podcast, but so lovely. Thank you.
I Thank you. Well, thank you, Kelley. If people want to learn more about your brand and possibly connect with you maybe on social media or something like that or via email, what's the best way for them to find you?
They can just email me. My email is Kelley. It's K-E-L-L-E-Y. And our operating company is called Pure Simple Foods. So Pure Simple Foods is the parent to Lark-Ellen Charm and Purely Sprouted. So you can just write me at Kelley at puresimplefoods.com. And yeah, but I love to just network and get to know people. So good job.
Yeah, and we'll put that email in the show notes. We'll also put some links to the brand's websites as well in case people want to try the product. It's always so fun to support people and experience the brand after you get to hear them on the podcast. So Kelley, it has been an absolute pleasure. I will certainly talk to you again soon. Thank you so much.
Thank you so much. Have a wonderful day. Bye bye.
Wanting to dive deeper into your financial strategy? Visit thegoodfoodcfo.com to learn more about the Good Food CFO software. We'll be back with a brand new episode in two weeks.
This podcast is for entertainment and informational purposes only and is not intended to provide personalized financial, tax or legal advice. Every business is different, so please consult with qualified professionals about your specific business and financial situation. Any actions you take based on what you hear on this show are at your own risk.
HAVE YOU RATED AND REVIEWED THE GOOD FOOD CFO PODCAST YET?
IT’S THE NUMBER ONE THING THAT YOU CAN DO TO HELP OTHERS IN THE FOOD INDUSTRY FIND THE SHOW!
And you can do it in just a few easy steps:
Click here to find the podcast on iTunes
If you listen on Apple hit “Follow” so you never miss an episode!
Scroll to the bottom of the page, Click “write a review” and share what you love about the show!
THANK YOU for helping to support & promote The Good Food CFO!