Mimi:
Welcome to The Badass CEO podcast. This is Mimi MacLean. I'm a mom of five, entrepreneur, Columbia Business School grad, CPA, and angel investor, and I'm here to share with you my passion for entrepreneurship. Throughout my career, I have met many incredible people who have started businesses, disrupted industries, persevered, and turned opportunity into success. Each episode, we will discuss what it takes to become and continue to be a badass CEO directly from the entrepreneurs who have made it happen. If you're renewing your career, dreaming about starting your own business, or already an entrepreneur, The Badass CEO podcast is for you. I want to give you the drive and tools needed to succeed in following your dreams.

Mimi:
Hi. Welcome back to The Badass CEO. This is your host, Mimi MacLean. And today I have on Alison Cayne and she is the founder and CEO of Haven's Kitchen. It's her creative cooking company with a mission to change the way people feel about cooking. And in 2018, Haven's Kitchen launched their first line of refrigerated globally-inspired sauces in a pouch, now available online as well as in over 2,000 stores across the country. Alison is the author of Haven's Kitchen Cooking School (Artisan 2017), and has contributed to the publication such as The New York Post, Forbes, Cherry Bombe. She is an adjunct professor of food studies at NYU, a guest lecturer at ICE, and a featured speaker at the TEDxManhattan. 

Mimi:
Thank you for tuning in today. Please subscribe so that way you get notifications on our next podcast which come out every Thursday. In addition, hop on over to thebadassceo.com to sign up for our newsletter so that you'll be also notified of our weekly blogs and weekly podcast. 

Mimi:
Alison, thank you so much for coming on today. I really appreciate. I'm excited to hear about your journey and entrepreneurship and starting your own company with Haven's Kitchen. So I would love to just start out with like, why did you start it and where were you in your career when you decided to start your own company?

Alison:
Yeah. Well, first off, thank you so much for having me. I think women struggle with the idea that we could potentially be bad asses and yet like so many of us are. So I think it's good to just say it right up front. But I married very young. I had five kids in eight years. I had been doing work in urban development and policy mostly related to housing but was always really interested in food, always was teaching cooking to friends and friends of friends. And then when my youngest went back to nursery school or went to nursery school, I went to go get a master's in food systems and sustainability at NYU. And as a part of that ended up having to have an internship, which sounds like a Nancy Meyers movie because it was kind of ridiculous. I had five kids under 11 at the time or something like that. 

Mimi:
There's a real life internship.

Alison:
Yep, exactly. Got an internship at the Union Square Greenmarket where I was teaching everyone from three year olds that the food that they like all comes from a farm and that it requires sunlight and humans and soil. And teaching 17 year olds that soda is cheap, but they will pay for it in the long run. And what ended up happening was the cooking classes that I was teaching in my home and the agriculture and sustainability classes that I was teaching at the greenmarket, I wanted a place where I could bring them together. So I opened a cooking school in 2012, not a professional culinary school, but a cooking school just for the home cook to figure out how to make better choices, how to get dinner on the table, how to feel good and have fun in the kitchen as opposed to thinking of it as a chore.

Alison:
And after about six years of seven days a week of classes, basically ended up creating a packaged sauce line at that time. We had three SKUs that basically were all of the work, but really good clean ingredient panels sold in the fresh set of the grocery store as opposed to shelf-stable, no added sugar, no extra salt, no preservatives. Stuff that we were teaching people how to make in the school, but that they might not have time for or might not want to take out a blender for, et cetera. We started in 14 New York City Whole Foods. We've grown year over year.

Mimi:
Maybe the thought there because you make it sound like, "Oh, well, Whole Foods, we just started there." A monumental task. So how did you go from, "Okay, I'm going to make sauces to 14 Whole Foods?"

Alison:
Yeah. Well, basically, I had a very, very flourishing, really lovely profitable brick and mortar business. And the idea of doing something more growth-oriented or scaling the brand or even just the acronym, CPG, all kind of freaked me out and didn't feel like my wheelhouse exactly. I was a hospitality person. I was a hands-on person. The idea of having a product in people's homes that I couldn't help them use felt daunting. But I did really feel that my students were representative of a larger group of people and they wanted to cook more. They knew cooking was good for them. They knew it was better for the environment, but they just couldn't get over whatever hump it was and they ended up ordering it or they ended up going out or-

Mimi:
Sounds like me.

Alison:
Yeah. I mean, now with the pandemic, a lot has changed obviously, but at that point, so people who didn't want to cook, it wasn't just that they didn't want to make actual dinner. It was they didn't want to think about what to cook and they didn't know how to make a shopping list and I don't have time and the cleanup and the dissatisfaction of making something that isn't great and I have put in this work and now...

Mimi:
No one's eating it. 

Alison:
Yeah, exactly. Or I feel kind of like uncomfortable about it. So it was these sauces basically, they're in clear pouches. They're really beautiful. They're really delicious. They can take a simple grilled chicken or grilled salmon and make it into sort of a gourmet meal. You feel really good about it. The packaging was more environmentally friendly, all of that, but yeah, to your question, how did we get into 14 Whole Foods? We went to the Fancy Food Show in 2017 at the Javits Center with a little table and a little sign. And we had hand-filled some pouches with some sauce. And I just was like, "Let's just see if any buyer..." I knew consumers would be interested. I didn't know that the grocery store buyers would be because it's a category disruptor, right? It's a sauce in the refrigerator and a pouch. It's kind of weird.

Mimi:
And then at this point, were you selling it direct to consumer anywhere or no, this is the first time?

Alison:
No. We had a fridge in the front of our cooking school because we had an all day café and we would put them in court containers and people would buy them like they were going out of style. So we didn't know how to commercialize it yet at all. And I wasn't going to spend any money trying to figure that out unless I knew that I had a customer. And that is still kind of how I operate.

Mimi:
You wouldn't go into the Javits Center. Those things are expensive too, aren't they?

Alison:
Yeah. I mean, it was a few thousand dollars and it was the only I could really get a sense of, am I going to do this? Is this worth it? And fortunately for us as the cooking school grew in popularity, we ended up being this place where all of these consumer brands had big launch parties and activations. So everyone from Casper and Warby Parker to every food and supplement and hair care brand. So we started getting an idea. I started seeing what went into this world a little bit. And we knew early on that as a refrigerated product that had a shelf life, it's a couple months, but it's still not a nice long shelf life.

Mimi:
I'm surprised it's even a couple months. Did you have to put something in it to last a couple months?

Alison:
No. We learned about what they've been doing to cold pressed juice for 20, 30 years. It's called high pressure pasteurization. And so rather than boiling it or adding in preservatives, you put it in a cold bath and apply a lot of pressure to it and it kills all of the stuff you don't want but keeps all of the micronutrients and all of the color and the vibrance. So back to the Fancy Food Show, definitely was like, "I just want to give this a go. I'm willing to invest a few thousand dollars to see if there's any bites or nibbles, but I'm not willing to kind of go out." And this was still 2017 and I was not the type of founder to go raise millions of dollars and build a website and try to buy Instagram ads. It wasn't my playbook. It wasn't where I came from or where I felt comfortable.

Alison:
So lo and behold, we have our little table, and sure enough, the head of grocery, Northeast Grocery at Whole Foods, comes up to the table and said, "I love these and who's your distributor?" And I said, "I don't have one." And he said, "What's your cost?" And I said, "I don't know." And he said, "How are they displayed on shelf?" And I was like, "No freaking clue." And he was like, "All right, great. Let's figure this out."

Mimi:
That's awesome.

Alison:
Yep. And so that was summer of 2017. March of 2018, we had figured out high pressure pasteurization, corrugate shelf talkers, pricing, a distributor.

Mimi:
He helped you with all that or you just kind of went back and regrouped?

Alison:
I regrouped. He was helpful. He gave bat in the wrong direction or the right direction, but he's not in the business of helping every brand figure their stuff out. But he definitely was like, "You want to have a shelf ready, corrugate, because they will tip over."

Mimi:
Mm-hmm (affirmative), if they're just in a bag.

Alison:
They're not going to always look beautiful on the shelf. So keep them in a box that they can just rip off the top and put on the fridge. And so that was really great advice. Just a lot of really good advice along the way. And yeah, it was kind of crazy. They did really, really well very, very early. We thought that maybe it was just because we were sort of a well-known brand in New York, but then we expanded to the whole region of Whole Foods and Wegmans and the fresh market and a number of other stores. Continued to do really well and then ended up going national with Whole Foods and into 600 Targets right around the time that COVID started. So we had some tailwinds because people were cooking more, some headwinds because we couldn't do any sampling and somehow where another...

Mimi:
Arrived and grew and flourished.

Alison:
Yep. It's growing and flourishing. Yeah. 

Mimi:
That's great. Now, looking back, is there any lessons that you look at and you're like, "Ooh, I wish I had known this from day one?" Is there a major one or several?

Alison:
I mean, I would say that if you don't mind, I'll start with the making of, and then go through the marketing of because I always picture it like moving from the left to the right on the org chart a little bit. Number one is margin. I think every founder, they have to have a very deep belief in optimism about their product and that's great and you need it. And also there are realities, right? So the reality really is if you don't see a path to at least a 40% gross margin and that doesn't come from when we get really big, all of our ingredients will be so much less expensive as we're seeing now, that is not the case necessarily with scale. You really have to know that early on. You will not be a happy camper if you have a gross margin of 20% and no matter how well you do, you continually have to raise money and dilute yourself and just continually be fundraising.

Alison:
So we very early on partnered with a co-packer who had the HPP technology. They invested in the business for that investment. They also got an exchange like not only a percentage of the company, but some exclusivity. We got a cap on the production costs. And very quickly, we moved into a really, really strong gross margin. So number one. Number two, transportation and distribution. If you are self-distributing at the beginning, which a lot of people are, they don't necessarily build that into their costs. So you have to pay yourself for distribution because at some point, if you do get bigger, you're going to be paying UNFI or KeHE or whoever it is, even a local regional distributor, you're going paying them some percentage and that will come right out of your margin. So that's number two.

Alison:
On the product and the sales side, don't call yourself... Our company was never going to be called Haven's Kitchen Sauce because we started as a cooking school. But a lot of people make the mistake of like Ashley's Chips.

Mimi:
Right. But then whenever the chips also becomes pretzels.

Alison:
Exactly, 100%. So be mindful, own your trademark, build a platform. What is the why? It sounds kind of trite at this point, but why am I doing this? Am I doing this because I want to make a pretty package or am I doing this because I'm genuinely solving a problem? And I think be honest with yourself like, does the world need another fill in the blank? Vegan plant-based fill in the blank?

Mimi:
Yeah. You have to solve a problem.

Alison:
Absolutely. 

Mimi:
Right. Someone's pain point and that's what you have to get across.

Alison:
Yeah. And I would say the most untalked about probably especially among women is money. This is going to be several millions of dollars and it's going to take several years for you to be profitable, especially in the food space.

Mimi:
And then you take that number and you double it or triple it.

Alison:
Yeah, yeah.

Mimi:
You double what you think it is.

Alison:
Yeah. No. I mean, every time I'm interviewed, I say very, very upfront I was very privileged. I was able to not have debt coming out of college. I was able to start a business that ended up being profitable. I was able to take some of those profits and start my new business with that. But banks are not lending to unprofitable companies as amazing and brilliant as you might be and your product is. So that means that you need to have friends and family, or at least some people who have friends and family who are willing to take a bet very early on. Don't think it's just going to happen.

Mimi:
And is that what you did? Did you raise capital or did you wind up just only between you and your packer?

Alison:
Yeah. So it was kind of funny because I identified the co-packer and they had done something similar with a beverage brand that had had a really big exit. So they had a precedent for this and they knew that they wanted to be part of what was happening in the condiment space. 

Mimi:
They're smart.

Alison:
Very smart and really made a bet on the innovation. But for 10% of a company with no valuation, what does that mean? We didn't know what 10% was the equivalent of, so we had to-

Mimi:
At this point, you had the Whole Foods contractor now.

Alison:
Yes. I don't remember if we had global yet. I know that we were national and I know that we were growing.

Mimi:
And so that's huge. I mean, you look at the valuations early on as an angel investor and you're like, "Wait, where did you come up with these numbers from? You don't have any sales."

Alison:
I mean, yeah, and that's the thing. So it's almost easier to get a better valuation when you don't have sales because there's a lot of nitpicking that can happen. But we basically came up with a pretty reasonable... I think we ended up saying 10% was $700,000. That meant that the post money was 7 million. And that meant that they put in whatever. I had to raise about another million dollars, which I did from a bunch of cooking school, really special guests of ours, but also the founders of our ex bar, Jared and Peter, Rachel Ray, who loved the sauce, a couple of really sort of strategic investors also. But no real institutional money.

Mimi:
So at this point, that you haven't had to raise money since then or?

Alison:
I have, yep. I did a priced round again last year. It's sort of my first fund, but they don't really operate that way. They're just wonderful people. You always need a little more than you think you need.

Mimi:
Well, the inventory costs so much money. So as you grow, the supplies that... while it's sitting wherever it's coming from, you're paying for it.

Alison:
Yeah. And I think also companies like mine that want to scale relatively quickly and make ourselves all gassed up for a strategic in 5 to 10 years. We have to spend more on marketing than if we were just planning on being a really strong profitable company that was going to stay in the family forever. You kind of have to decide early on what are you going to be when you grow up and build it, again, sort of outcome-based is the way that I think about it. So I have a website and a marketing percentage that is higher than what it normally would be because as we all know, there's buzz, there's FOMO. There's looking like a big kid on the playing field. There's all sorts of stuff. And that marketing money is not coming from the sales of your product. So it's either coming from debt or equity and some people do it with debt, but it's not always as easy.

Mimi:
And it's hard to find people to do it for equity.

Alison:
I mean, the thing is at the end of the day, you're going to have to raise money, period. And either you are doing it at a very high interest rate with a somewhat predatory lender because those are the lenders that take chances on companies this size, or you're doing it with very thoughtful people who can bring value beyond the check, which is the ideal. So you try to have someone who understands legal and someone who understands ops and someone who has connectivity to grocers and someone who understands digital marketing. You try to build a cap table where the money's coming in, but also these are mentors and advisors and sort of your best assets of the company.

Mimi:
Now, you bring up a really good point about marketing. I think a lot of people are naïve when they launch a company or build a website or a product that like, "Okay, I just flip the switch and everyone comes running." And I would love for you to give what you've learned, lessons learned either from your brick and mortar store or from your current company. What have you done as far as marketing? Has it been digitally? Is it like influencers or is it... how do you get that word out there without being...? I mean, it's so expensive, right? If you go down the route of like Google ads or Facebook ads, you could be bankrupt in two minutes and not have any sales.

Alison:
Yeah. I mean, I think, again, it goes back to outcome based, right? With marketing, there's the top of the funnel, there is just like awareness building that has very little traceability or trackability more so for us because we're a wholesale brand, right? We sell at grocery stores. So we could cover the country in Instagram ads and have absolutely zero idea if those are translating to actual sales. So I think there was a moment in time several years where digitally native companies, the arbitrage was fairly straightforward. Their cost of acquisition to LTV ratio was really good because they could get enough people buying just from covering the planet with Instagram ads. That time has passed. It's no longer the case. A whole series of things happened, iOS, et cetera, security, privacy laws. 

Alison:
So that has been a bit of a reckoning for those companies. We were never in that boat because it was never the way that we got product into people's hands. And it was also very unclear to us if it would actually work. So what we did early on was very Luddite retail centric. We did a ton of demos, just a ton of human beings in grocery stores with squeezy sauces. Hey, what are you making for dinner tonight? Did you know that this sauce would go really well on your steak? Oh, I see you have salmon. Do you want to try our gingery miso? Because maybe it'll go great on your salmon. So all of that was really great and worked really well until COVID. And then all of a sudden, there is no in store, right? And so now the challenge is, okay, what are our...

Alison:
Instacart was a great opportunity for us. People are on this platform and they're looking to make dinner. So we are definitely buying those keywords and making those banner ads. If you are making chicken and there is a banner ad for our tahini sauce that goes great on chicken, that is a really good way to meet a consumer when they are at that bottom of the funnel area. They are shopping. They are looking for dinner. Where can I put myself in front of them so that I'm more likely to get them? And then in my business, the most important piece is the repeat, right? You can put coupons on things. You can give away free everything till the cows come home. But if someone doesn't buy it again, then you have no business to your point.

Alison:
So what we've learned about marketing is that every channel has an outcome, right? We have 200,000 followers on Pinterest. We are not converting to sales on Pinterest. We don't think of it as the sales converter. We think of it as there are people out there. They're seeing our pouches. They're seeing that we bring value beyond the product that we're helping them cook, that we're making them feel like this is fun and easy. And if they happen to see our sauce at the market, they'll be like, "Oh, I recognize that. I think I'm going to try that." And every channel has a different function and a different demo and a different way that you speak to them and all of that costs money and time.

Mimi:
And kind of piggybacking off of this too is it's probably a very competitive industry. So how do you stand out with your competitors?

Alison:
Well, it's interesting because we almost have the opposite problem. We don't really have competition. We are such a weirdly unique product on the shelf that it's a totally different problem to have. It's kind of like homeless in 2009. Consumers had no idea what this tub of brown stuff was.

Mimi:
It's the healthier version of the Hamburger Helper that we grew up with in the '70s.

Alison:
100%. Exactly. No, that's exactly what it is. And the thing is that people are like, why is it in a pouch? Why is it fresh? What is chimichurri? What do I do with it? We have a lot of other things that we need to solve, but competition... There's competition for mind share and media and the media doesn't care if you're shelf-stable or if... And there's competition for shelf space, but all of the different competitors for lack of a better word are different, even from store to store. In some stores, we're in the vegan plant-based dairy buyer set next to sauerkraut and kimchi. In others, we're next to salad dressings in the produce. So we have to tailor the way we think about standing out differently depending on not only the store but the category and where we are. I mean, it's a big puzzle.

Mimi:
Yeah. And I think another big difficulty for a lot of entrepreneurs is employees building teams and you have a big diverse team. And so I don't know if you could talk a little bit to lessons learned to that and give advice about how you've had to grow along the way.

Alison:
Yeah. Very early on, when you learn anything about sustainability or agriculture or food policy, the number one thing in gardening is you never just plant one crop. It's why I diversified the business in 2018. It's why I am inherently building a very rich diverse team of people. Not because I think I'm doing anything noble, but because it is fundamentally, again, an outcome-based decision. It will survive and it will be stronger when there are different crops growing in the same garden. The Irish potato famine happened because there was one crop of potatoes and there was a blight and that was the end of that. Right? You've seen it all across history. You don't plant one type of seed. So that means that you bring people from different backgrounds, different ethnicities, different skillset, different genders, different identifications, different everything, everything. And the more diverse and the bigger the garden, the more butterflies, the more bees, the more pollen, the more everything. The more there's just this rich incredible loamy soil that happens and you want a garden, right? You want a business that can handle a blight and a storm and a pandemic. And you want opinions from people that don't look or sound or feel like you do because you've already got your opinion. You don't need everyone to just repeat the same thing that you are. Right? Today's my 50th birthday.

Mimi:
Happy birthday.

Alison:
Thank you. 

Mimi:
Thank you for sharing it with me. 

Alison:
Yeah. No, thanks for having me. It felt appropriate and I am not necessarily the target demographic for my own product. Right? And so I'm a New Yorker. I'm an avid home cook. I don't have kids to feed right now because they're all at college. So it would be really silly for me to hire a bunch of people that are my age. Right? It's exactly the same with hiring for anything. You want wild and growing. You know?

Mimi:
Yeah, to be different. I mean, it is amazing how even the different generations just think so differently. Right? It's obvious, but even their work ethic or hiring or what they prioritize as they're coming out of college. And yeah, you're right. You're very accurate for saying that.

Alison:
I think that has actually too... I mean, I grew up, my first job, I had a job, but I also was expected to babysit my boss' kids whenever she asked and I got people food whenever they needed it even though I had an office and technically I was a manager. And I didn't ask questions because I was just so freaking happy to be there. But no one gave me context. No one gave me the why behind what I was asked to do.

Mimi:
You did it. 

Alison:
I just did it. And arguably, I think I did it pretty well, but could I have done it a lot better if I knew the impact that my particular task at hand was going to have on not only that week, but the larger business? And taking the time to explain to the younger people on the team who really care and want to know like, how is my work making an impact? What am I doing this for? There's a resistance, I think, amongst some older founders or older bosses. They're like, "Just do it."

Mimi:
Yeah, because that's what I did. Right?

Alison:
Exactly. I had to. But for me, it's just much more like, actually, it's really good for me to think through, is this something that I want you to spend your time and energy on? And if so, here's why and here's what I think the impact is going to be. And there have been times where going through that process just for myself before I hand something off to someone has shifted the direction of what I've asked them to do. So I think net-net, I'm thrilled to work with younger people who aren't going to just do whatever is in front of them because they've just decided that that's not how they want to live their lives.

Mimi:
Especially now, right? An employee's market, it's so hard to find workers, good workers. So last question, what advice do you have for young entrepreneurs or other fellow CEOs? Any other last minute tips or inspiration?

Alison:
I mean, I think it kind of goes back to when you said what makes you different. We are, as far as I know, the only sauce company that has a QR code on the back of our pouch that takes you to 500 recipes, 150 videos not only just teaching you what to do with our product, but teaching you how to hold a knife, teaching you how to keep your fridge well stocked, teaching you how to select cookware. Again, it goes back to the north star like, why are you doing this? And I think the first question, young or old or anybody starting a company, especially in food, especially now, it's never been easier to design a package, find a co-packer, and get some sales online. Never. And if that's what you want to do, that will be easy for the most part. You can buy those sales. People have been buying sales forever, right?

Alison:
The question then becomes, but what's the problem that you're solving? Who are you solving it for? And your answer can't be everyone because that isn't real, right? The more that you ask yourself, what is the platform that I'm building? What is the problem that I'm trying to solve? How does my product help people in their lives? How do I know how to talk to those people? You ask the people that are buying it, why do you like this? Why do you use this? Because again, I might think I know, but I don't know. So all of this is like if you're just doing this because being a founder is somehow cool or it's the new chef or film school or whatever-

Mimi:
You're not going to laugh. It's too much work.

Alison:
A, it's too much work. It's too expensive. It's really exhausting. If you don't have a driven core that is not only you but your whole team talking about team and buy-in and finding people who love you and love your product and care about the growth of your company, if you can't give them a hardcore reason as to why this thing should exist and why it is making people's lives better, and then everything comes from there. What are we making? How are we making it? How are we marketing it? Where are we selling it? Who are we selling it to? All of those questions come from that fundamental thing. If you haven't solved that or you're like, "Ah, I'll figure it out," you're already behind. 

Mimi:
You'll lose time and money. You got to figure it out at some point.

Alison:
Mm-hmm (affirmative), yep.

Mimi:
This has been great. Thank you so much, Alison. Happy birthday to you.

Alison:
Thank you.

Mimi:
Is the best place for people to find you on Instagram or?

Alison:
I would just go to havenskitchen.com. It's an amazing new website. It's just newly launched. You can find filters for whatever you want to make for dinner. There's store locator, tons of videos. You can save recipes to a virtual cookbook that you like. 

Mimi:
Oh my gosh, that's great.

Alison:
Yeah. We're really proud of it. Yeah.

Mimi:
Oh, God. I need this. So I'm excited to go and try it.

Alison:
Yeah. Well, great.

Mimi:
Thank you again. 

Alison:
Thank you. Thanks for having me.

Mimi:
Thank you for joining us on The Badass CEO. To get your copy of the top 10 tips every entrepreneurs should know, go to thebadassceo.com/tips. Also, please leave a review as it helps others find us. If you have any ideas or suggestions, I would love to hear them. So email me at mimi@thebadassceo.com. See you next week and thank you for listening.