- How to Set Up your CPG Business for E-Commerce Success - May 14, 2020
- 3 Costly Mistakes Entrepreneurs Make When Working with Co-packers - February 25, 2020
- How To Get Your Products Into Whole Foods - October 21, 2019
PartnerSlate’s Q+A with Vive Organic’s Co-founder & COO, Kyle Withycombe
You may have heard of them, and if not yet, you will soon. Meet Vive Organic, one of the CPG industry’s top up and coming wellness beverage brands. We had the opportunity to sit down with their Co-founder & COO, Kyle Withycombe last week and pick his brain on their journey, the ups and downs of a thriving startup and some keys to success that he has picked up along the way.
Kyle “dished” out advice on where to begin, how to grow, stay organized, and manage all the many moving parts that comes along with a food startup. With experience at three startups, we knew he’d have some valuable advice to share!
Question #1: Tell us about Vive and how you guys got started? Where did you get the idea to make a wellness shot?
Wyatt, my business partner, saw the trend back in 2014. At the time, he was working with another startup and didn’t have much time to focus on the idea. There was a clear opportunity in the category, for a nutrient dense product, a convenient way for a consumer to get all of the benefits of a larger format, while eliminating the sugar, calories, water, etc. It was exciting. I had been working in the organic food and beverage industry for the past 5 years at the time, with most of my experience in operations. He had the idea but didn’t really know how to manufacture or distribute refrigerated beverages. He came to me and our other co-founder JR in 2015, pitched us the idea, and we were immediately in.
We hit the ground running, within weeks we were making our first formulas/flavors and talking to prospective customers. I would say my first piece of advice is don’t be afraid to just start. Even if you don’t know quite where to begin, you’ll figure it out along the way. There are a lot of great resources out there like PartnerSlate that can help you find the knowledge and partners needed to get you going in the right direction early on.
JUST START! Even if you don’t know where to begin, you’ll figure it out along the way.
Question #2: How was the process of developing your formula(s) and finding a co-packer?
As a startup, finding a co-packer can be challenging. There can be a limited number of manufacturers who specialize in what you need, but also a limited number of manufactures who can scale as you grow. Finding a manufacturer who buys into your product & business plan and is willing to invest in your growth is key in building a strong operational foundation. You will need to pitch the copacker like you would a potential investor, get them to buy into what you are creating.
This industry has a strong network of professionals who are willing to help you throughout your search. I spoke with hundreds of people, who pointed me in many directions, until I was able to find the right partner. I found equipment manufacturers to be very helpful in identifying those who can manufacture/co-pack your product.
Honestly, that’s why it’s awesome having online platforms now that are making this process much more efficient by creating an environment where entrepreneurs can connect with hundreds of people in the industry with the click of a button. This is really what the industry has been lacking.
When it comes to developing your formula. If you don’t have experience formulating products, find a food scientist who specializes in your product category. They usually have tons of experience, and can help with a wide range of activities such as formulating, product testing, production support, SOP creation and nutritional testing.
Question #3: Supply chain has so many moving parts, how do you keep it all organized?
Strong processes are KEY in building a successful supply chain! With all the moving parts, its important to build a process for EVERY piece in the chain. You will find it very difficult to manage the supply chain effectively if you are running wild, not checking the boxes to ensure the ball is not being dropped.
Strong Processes -> Successful Supply Chain
Get the right systems in place to scale your business. Most startups are able to run the business off of excel, which can be a powerful tool until you are able to implement an ERP system down the road. Build out reporting and planning tools that give you visibility into how you are operating. Gather data, analyze and adjust accordingly. The business will change daily, and the data you receive will allow you to change with it. Make sure you are using it to your advantage.
Question #4: How do you currently source the ingredients for your products? Do you recommend doing it yourself or building it into your co-packing contract?
We always source the highest quality ingredients in order to provide the consumer with the most efficacious product. Since quality (along with pricing) is one of the most important aspect of sourcing, we keep control over who we buy from. If you hand this over to a co-packer to manage, you lose a little control over both the quality, and price of your supply. Because of this, I would recommend keeping this in house, and not relying on your copacker to manage and meet your needs.
The downside of this, is the resources required to source ingredients in house. It’s definitely a lot of work and with a massive amount of responsibility already on your plate it can be a little daunting. Using platforms like Partnerslate is a great way for people new to the industry to identify a handful of suppliers that can help supply their needs. They have a network of countless suppliers to connect with.
Question #5: A lot of times the difference in a successful food business and one that fails is correctly managing your costs and determining the right price for your product. How important is it to correctly manage your margins?
Super important! If not one of the most important parts of your entire business. I have listed a few tips below on how to manage margins correctly and keep your costs in check.
- Work through your multi-channel pricing strategy early on
This will enable you to work through long term financial planning, and give you a clear pricing strategy that you can build upon as you grow.
- Build a strong promotional plan, forecast and budget accordingly.
Trade spend can be a difficult one to get your arms around, and manage appropriately. If you don’t pay close attention to your spend, your margins can take an unexpected hit. Create a system that provides good visibility into your spend, and monitor it closely.
- Find opportunities to reduce costs whenever and wherever possible.
Work closely with your vendors and provide them visibility into your business plans and growth so that they can plan accordingly and are ready to grow with you. Leverage this growth to reduce material/labor costs.
- Constantly look for ways to improve, solve inefficiencies and reduce risk.
Create a budget, forecast margins and work to build processes and procedures around hitting your goals. It will be very difficult to manage margins effectively without a clear plan that the team can work against.
Question #6: Vive has had some crazy early growth – what has been the most difficult part and the most fun?
Yes, we have definitely experienced strong growth since we launched. And fortunately, we have been very successful in managing this acceleration. As I mentioned before, developing strong processes is the most important step in ensuring you can scale your business. Make sure you are prepared for this when the time comes. The hardest part about growing so quickly is ensuring you stick to these processes in the moments of chaos. Cutting corners to get something done will usually end with a negative result, creating more work in the end.The most fun part is talking to customers and seeing them respond positively to our product and love it as much as we do.
Okay, what’s one bit of advice you have to offer to a fellow food or beverage entrepreneur out there?
Stay focused on what you need to achieve in the short term, to have long term success. With so many moving pieces, it’s easy to get distracted and fall off course. Find a strong support system in advisors, and lean on them for their knowledge and expertise.