This week's special guest is Kara Goldin, CEO and Founder of Hint, the No.1 non-sweetened beverage company not owned by Coke, Pepsi or Dr.Pepper in America and the bestselling author of Undaunted: Overcoming Doubts & Doubters We learn about Kara's journey from tech executive to food entrepreneur, motivated by her desire to find healthier beverage options. It's a fascinating story of perseverance and pivots, starting with Kara and her husband boot-strapping their way into Whole Foods to triumphantly creating a whole new category and and evolving Hint into a powerful omni-channel brand with strong wholesale, direct-to-consumer distribution and, now, even a store! We also get Kara's perspective on striking the right balance between wholesale and going direct--lessons that all brands can benefit from.
This week's special guest is Kara Goldin, CEO and Founder of Hint, the No.1 non-sweetened beverage company not owned by Coke, Pepsi or Dr.Pepper in America and the bestselling author of Undaunted: Overcoming Doubts & Doubters
We learn about Kara's journey from tech executive to food entrepreneur, motivated by her desire to find healthier beverage options. It's a fascinating story of perseverance and pivots, starting with Kara and her husband boot-strapping their way into Whole Foods to triumphantly creating a whole new category and and evolving Hint into a powerful omni-channel brand with strong wholesale, direct-to-consumer distribution and, now, even a store! We also get Kara's perspective on striking the right balance between wholesale and going direct--lessons that all brands can benefit from.
But first we open up the episode with our quick takes on recent retail news that caught our attention, including Camp's rather ironic move into a former Toys R Us space. We also learn that Amazon processed more in the value of product returns than Target sold the old fashioned way last year and that the soon to be world's biggest retailer has (as yet) undisclosed plans for a small space in a Texas mall. We wrap up by unpacking Adobe's holiday e-commerce forecast and try to make sense of Crocs continued remarkable success.
Kara Goldin is the Founder and CEO of Hint, Inc., best known for its award-winning Hint® water, the leading unsweetened flavored water. She has been named one of InStyle’s Badass 50, Fast Company’s Most Creative People in Business, Fortune’s Most Powerful Women Entrepreneurs, Fortune's Most Innovative Women in Food & Drink and EY Entrepreneur of the Year for Northern California. The Huffington Post listed her as one of six disruptors in business, alongside Steve Jobs and Mark Zuckerberg. Kara has successfully navigated the world of large companies and startups in many industries including media, tech and consumer products. In addition, she understands retail and direct to consumer well. She is an active speaker & writer and hosts the podcast The Kara Goldin Show where she interviews founders, entrepreneurs and other disruptors across various industries. Kara’s first book, Undaunted, published by Harper Leadership, was released in October 2020. She lives in the Bay Area. Follow Kara on all social handles @KaraGoldin
Steve Dennis is an advisor, keynote speaker and author on strategic growth and business innovation. You can learn more about Steve on his website. The expanded and revised edition of his bestselling book Remarkable Retail: How To Win & Keep Customers in the Age of Disruption is now available at Amazon or just about anywhere else books are sold. Steve regularly shares his insights in his role as a Forbes senior contributor and on Twitter and LinkedIn. You can also check out his speaker "sizzle" reel here.
Michael LeBlanc is the Founder & President of M.E. LeBlanc & Company Inc and a Senior Advisor to Retail Council of Canada as part of his advisory and consulting practice. He brings 25+ years of brand/retail/marketing & eCommerce leadership experience, and has been on the front lines of retail industry change for his entire career. Michael is the producer and host of a network of leading podcasts including Canada’s top retail industry podcast, The Voice of Retail, plus Global E-Commerce Tech Talks and The Food Professor with Dr. Sylvain Charlebois. You can learn more about Michael here or on LinkedIn.
Michael LeBlanc 00:05
Welcome to Remarkable Retail podcast, Season 3, the baker's dozen episode, Episode 13. I'm Michael Leblanc.
Steve Dennis 00:12
And I'm Steve Dennis.
Michael LeBlanc 00:14
Well, Steve, I'm going to give listeners a bit of, and viewers a bit of a hint as to who our special guest is this episode, the amazing Kara Goldin founder and CEO of Hint infused water and amazing CEO, descript-, subscription based retailer, Best Selling Author of Undaunted: Overcoming Doubts, and Doubters and, Steve, I have to say, after you and I talked with Kara, I have no doubt that our listeners will love our interview with her.
Steve Dennis 00:41
Oh, I think it's pretty certain I saw an article about Kara the other day referring to her, to her as the OG of DTC because Hint has actually been around quite a while. So, it's great to hear about her journey and some of the some of the takeaways, but, and I'm a fan of the product. So, even before we had her book to, to be on the podcast, so.
Michael LeBlanc 01:08
Yeah, it's a great personal and professional journey, lots of lessons and, and we'll, we'll get into that in our great interview, but for now, let's jump into news of the week. So, one of our former or the earlier this episode, we interviewed CEO Ben Kaufmann from CAMP and apparently, they've taken over some space at Toys R Us tell us what's going on.
Steve Dennis 01:29
Yeah, I, kind of, love the irony of this. Toys R Us is one of those companies that, it's this iconic brand that has basically disappeared, blowing, great brand recognition, massive store presence, etc. and the space that CAMP is going into in the Garden State mall in suburban New Jersey, was actually space that Toys R Us tried to use for a return to retail. So, a smaller space than typical Toys R Us store in a mall, which is not typically where most of the Toys R Us stores were.
Steve Dennis 02:07
But that little experiment from Toys R Us I think were two of them, the other one I think was in Houston, that did not last and now CAMP as part of their expansion plan is moving into that space and it's, kind of, it's hard to say from, you know, one store or CAMPs still a pretty small business, but you're seeing a totally different kind of business model much more experiential and much more focused
Michael LeBlanc 02:30
Yeah.
Steve Dennis 02:30
move into a former Toys R Us space. I don't know if there's whether it's ironic whether there's a sense of justice or whatever. But
Michael LeBlanc 02:37
Well, Ben had certainly hinted that there was big things coming for the brand. So, it sounded like there's a lot of interesting things happening. This could be one of those moving parts. So, we'll, we'll keep an eye on. All right. Well, let's talk about Amazon for a second. So, you and I both know that returns are a reality of retail and returns and ecommerce are just generally, organically higher than returns-to-store, but you heard some information about Amazon returns that were pretty interesting. Share, share.
Steve Dennis 03:07
Yeah, a little birdie told me and this may be buried somewhere in Amazon's filings that last year, Amazon processed $100 billion in returns. I mean,
Michael LeBlanc 03:23
Billion.
Steve Dennis 03:23
100 billion. Obviously, Amazon is a very large company, but just getting my head around $100 billion of merchandise going back the other way. When you think about how few companies even do $100 billion in sales worldwide. So, this is I guess, not the dirty little secret of ecommerce anymore. Returns had been an issue before ecommerce but as you mentioned, they're particularly high in eCommerce and the environmental impact of that, because a lot of stuff
Michael LeBlanc 03:53
Yeah.
Steve Dennis 03:54
basically, gets thrown away the cost of handling it is a big, big issue. And I suspected because of some things we've seen Amazon do in recent years. That was a big focus for them, but when I heard that number, I just, it was hard for me to get my head around it. So, they actually have these quite large returns processing centers that they've been building out. So, yeah, that stuffs got to go
Michael LeBlanc 04:18
You, got to somewhere, right?
Steve Dennis 04:19
someplace in the old reverse logistics chain. So, yeah. I guess my heart-.
Michael LeBlanc 04:23
I guess.
Steve Dennis 04:24
My remarkable number of the week 100 billion.
Michael LeBlanc 04:27
It's remarkable, I guess, if we assume Amazon's three 400 billion, which they're, kind of, tracking two, I guess, indexes to both 30% return which is
Steve Dennis 04:36
Yeah, yeah.
Michael LeBlanc 04:36
really high because when, when you look at the QVCs of the world, they're, they average about 17 to 18% on a blend of things, right.
Michael LeBlanc 04:46
Yes, that's about right.
Michael LeBlanc 04:47
So, that's high. That's, that's, if it's 33%, that's high.
Steve Dennis 04:50
Yeah.
Michael LeBlanc 04:51
Right. That's a lot, That's a lot of dough.
Steve Dennis 04:53
Yeah, it's much, much higher than I would, would have expected. So, anyway, we'll I'm not 100%, I'm not sure that number is accurate, but I'm pretty sure it's at least directionally accurate, so.
Michael LeBlanc 05:04
And so, let's talk about, they're making some moves in the physical world, in your part of, part of the world in Texas, what's going on in San Antonio?
Steve Dennis 05:14
Yeah, well, so we've talked a few times about Amazon's different physical moves. This one's kind of curious, they are taking over about a 4500 square foot space in the North Star mall, which is a regional mall on the north side of San Antonio, as I recall, and they have not disclosed what they're doing with it, seems like it's too, definitely, too small to be an Amazon bookstore, too small, I think to be an Amazon Four Star store. So, the question is, what's going to be and some speculation, my speculation is that it's going to be essentially a buy online, pick up, by online, return to store, to, kind of, connected to the returns side of things.
Steve Dennis 05:58
But, you know, we've seen Amazon and we talked about last week with their, what they're doing with their new Four-Star store. They're starting doing a lot of things really around the fulfillment side, you know, you can return stuff at Kohl's, or their lockers. Some of these things have returns and pickup centers, they put in Whole Foods. So, my guess is this is a variation on a theme in a pretty high traffic mall, but we'll see, I imagine in the next month or so we'll know exactly what they're doing.
Michael LeBlanc 06:29
Well, maybe they're bringing that European idea of a hair salon to America in Texas. You never know, right?
Steve Dennis 06:36
It'll be a big hair salon if it's in Texas, but
Michael LeBlanc 06:40
All right, well, it 'tis the season and the season I'm talking about is forecasts for the holiday season. So, they're all starting to roll out and Adobe put their forecast out, I was looking at it this week as well. Any numbers jumped out at you from the Adobe review of the US forecast for holiday?
Steve Dennis 06:56
There's two different ways to look at it. ECommerce is predicted for the holiday to be only up 10%. And I say only because last year, I think it was up 33% or something like that, which is kind of the acceleration around COVID. But in general, I think we've been used to 15 1617 18% kind of numbers. So, this is a pullback. But we have to keep in mind, it's from a very, very high state. So if you look across the last two or three years, we've, it's still, you know, a lot of growth, faster growth and physical retail on a smaller base. So, I think a bit, bit of moderation.
Steve Dennis 07:37
The other thing that kind of jumped out at me was that their prediction around cyber Monday or cyber five was growth considerably below that, that overall 10% number. And I think what's going on there is really the moving forward of holiday purchases that there won't be so much concentrated on these big event days because people are starting their shopping earlier, which has been a general trend, but particularly with all this supply pain supply chain stuff. So, I think that's to be expected. And I frankly think we paid too much attention to individual shopping days anyway. There's always stuff going on that kind of moves, moves things around, but certainly a very strong ecommerce year. Not as strong as last year. But overall, you know, pretty impressive growth across a two three-year stack.
Michael LeBlanc 08:22
Let's finish off with, with Crocs. So, Crocs is killing it. They put out some DTC numbers that were just remarkable. So, did you have a chance to take a look at their numbers and what do you think of a business like Crocs?
Steve Dennis 08:34
Well, first of all, I'm gonna say and I don't want to sound too snobby, wearing my Prada loafers, but I don't get, I don't get Crocs. I had never got Crocs. I’m still looking at Crocs, but there's no denying the, the incredible success they've had in the last few years. In fact, their CEO Andrew, Andrew Rees is the guy I knew a little bit back when he was at LEK Consulting, did some work with him. He's a, he's a great guy, fabulous leader. And this brand is just, just on fire. It's become a phenomenon. I think I saw, like, fur-lined Crocs or something, they're coming out with.
Steve Dennis 09:09
But yeah, I mean, then the numbers sort of lost track of them, but I think 70 plus percent year over year growth, you know, great profitability, pick the stocks up like two and a half times in a year and a half or something. I mean, every metric is just amazing. gross margins, improve 670%. So, I mean, you talk about a business brand that's firing on all cylinders, both direct to consumer and wholesale. It's really amazing. And they also said in their earnings announcement that they're really not having a heck of a lot of problems with the supply chain, which I can't think of a major retailer or brand that hasn't alluded to the problems and they're the first one that kind of said, you know, we got it. We're okay.
Michael LeBlanc 09:54
And they're fun and such a well-run company. So, all respect out to the folks at Crocs. So, I want to take this opportunity to remind, I want to take this opportunity to remind our viewers and subscribers to Remarkable Retail to tune in either on our YouTube channel or of course, if you're watching on YouTube, of course, there is the podcast or some bonus content on our YouTube channel, smash that subscribe button so you don't miss a single minute.
Michael LeBlanc 10:20
And also, shout out to my new podcast Conversations with CommerceNext and on a recent episode, we interviewed the CEO and CMO of Crocs, coincidently, so it's a great interview and this our, that podcast is different than this one. We talk a lot about DTC and E comm. We get into the business side, but then we spend about half to podcast talking about the people like we talk about their careers and career advice and career trajectory. So, it's different, but we talk to some great people. So, I encourage everybody to tune in and join me on that. So alright, without further ado, let's get to our fantastic interview with Kara from hint.
Steve Dennis 11:00
Well, we are excited to welcome Kara Goldin, the founder and CEO of Hint, to the podcast. Hi, Kara. Thanks for joining us.
Kara Goldin 11:09
Hello. Great to be here.
Steve Dennis 11:10
Well, we've been, I think, this, this interview has been on the books for a while you're, you're a busy person. But before we jump into some of our discussion, we like to kick things off by having our guests tell them a little bit about themselves and their professional journey. And then we'll dig into your book, we'll dig into what Hint water, or I guess it's more than water now, what Hint is all about, so would you mind just telling us a little bit about yourself?
Kara Goldin 11:35
Yeah, absolutely. Well, I'm the founder and CEO of Hint, which as you mentioned, is best known for its water, but we do have a few other products and categories outside of water that we've created. And I started the company about just over 16 years ago. Now, I wasn't a beverage executive. I was, I guess, a tech executive. I don't know what that really means, but, but just because I think people always like to brand you in certain categories. As you're a tech executive, you're a beverage executive.
Kara Goldin 12:11
But I think for me when I had this idea, when I had figured out how to solve a problem in my own life around that, what I was drinking, and why I wasn't drinking something that was better. For me, that's when I came up with this idea for an unsweetened flavored still water. And no one was doing this. I wish they would, I wouldn't have started this company if I would have found the product. And, and, but I thought what the heck, you know, what's the worst that can happen, let me just go take it to this brand-new store Whole Foods that had opened and see if I can get the product on the shelf.
Kara Goldin 12:52
And like I said, 16 years later, we're the largest independent non-alcoholic beverage in the US that doesn't have a relationship with Coke, Pepsi or Dr. Pepper, Snapple and, you know, kind of an accidental entrepreneur, again, just looking at trying to solve problems, which I'm such a huge believer that it doesn't matter what industry you're in, when you're a person that is just has a maybe they call them visionary entrepreneurs, people who wish and see the future a little bit and want to make change. A little bit crazy.
Michael LeBlanc 13:32
So, as I listened to that, were you always curious, were you always looking to solve problems, I mean, listen, let's just peel back a little bit of your, your kind of personal journey, like what got you to the point you said you're attacking you. You were a tech executive, is that, is that the path you were on and then you discovered listen, I, there's a better thing I'm gonna try. I'm gonna try making a whole solution for a problem I have, but it is this intersection of the personal and the profession is kind of intriguing. Tell me a bit more.
Kara Goldin 13:58
Yeah. Well, you know, it's interesting, I think in many ways writing my book was, was therapy, right. And many therapy sessions have sort of writing and thinking a lot about this, and I was the last five kids. My dad was, I call him, a frustrated entrepreneur, because he was, he had developed a product, very entrepreneurial product many years ago called Healthy Choice. He was working for a large company, Armour Food Company at the time and, and, you know, it was like I was I was a little bit of a rat kid, like, I would just sit there and say, you know, to my dad, if you're so frustrated, why don't you just quit.
Kara Goldin 14:34
You know, and of course, yeah, we had five kids. I mean, he, you know, cared about getting us through college. He wanted to put food on the table and, you know, a roof over our heads and so many, many years later, when I became an entrepreneur, I sort of, you know, got it, I guess, at that point, but, but it was, you know, I guess, being the last five in many ways I was, I was kind of forced to do to go and figure a lot of stuff out.
Kara Goldin 15:02
You know, and I, again, like, I look at me, I have four kids and I look at my fourth child, he's probably the most independent of any of them because at that point, you're like, Okay, go do whatever, just, you know, be careful that you know, and that's, that's what you do, right. So, I think that when you are not given the roadmap, exactly, you sort of, you know, think about maybe what your brothers and sisters have done, what they've gotten away with, you know, past, past experiences, whatever. That gives you some kind of guide, but then you are also trying to figure out, what else can I do, maybe it's what else can you do to be different or whatever.
Kara Goldin 15:44
So, ultimately, you know, that was very much me as a, as a kid, I never called myself an entrepreneur by any stretch. I mean, frankly, when I was growing up, I don't, you know, we didn't have classes that were, or majors and entrepreneurs and, but for me, it was really about, you know, going, and I always wanted to do something that I enjoyed, and, and that for me, was, was really kind of the start of it, but I think so often, it's we graduate from college, and still to this day, when we graduate, and I have two in college now, one in graduate school where you know, this, there's this idea that you graduate, and then you have to go do something in your major. And how many people do you know that don't, whatever they're doing today has nothing to do with their major, right and I am constantly.
Michael LeBlanc 16:40
I'm a criminologist by the way, I'm a one un-, one undergrad in criminology and one in
Steve Dennis 16:44
You should come visit my philosophy store that I opened.
Kara Goldin 16:47
Right, Yeah, I mean, it's, it's, this is the way the world works. And so I'm constantly telling my kids this, and also, you know, my, my, their friends, as well, but, you know, try and figure out what you think you want to do and then maybe go try that and then that should just fit the launch path, right?
Steve Dennis 17:06
Yeah.
Michael LeBlanc 17:07
You know, Hint started, I wanted to talk a little bit about, you know, right now, it's it, you're in the nexus of the DTC direct to consumer, Steve gets some on his doorstep kind of business. Now, you also, did you start at wholesale, or did you start at direct to consumer, where did the DTC part come in was always part of it. So, just about business and how you became and how it evolved just a little bit, you know, from the short history of time, over 16 years to where to start and then we'll, Steve, she wants to talk about this, the whole, the DTC state of automation today?
Kara Goldin 17:41
Well, so basically, I really believed that I was leaving, all I knew behind, right, that I was starting in this whole new industry, and had to kind of, in many ways, go back down to the bottom to kind of relearn things. I mean, the day that I took the product into Whole Foods to try and get it on the shelf, I, you know, was getting asked questions like, what's the shelf life? You know, what kind of preservatives? Are you using the product? You know, how are you distributing the product? Have you talked to all these things that I was like, uh, I've no idea what they're talking about? It was a total foreign language.
Kara Goldin 18:20
And so it was really, really clear to me that, probably, I didn't know how long it would take, but I had to try and figure out this puzzle and try and figure out this problem, I would literally stalk people at Whole Foods trying to, you know, tap them on the shoulder if they looked official, not only working for Whole Foods, but maybe they work for, for another brand. I joke in my book that, you know, I figured out that people who were kind of competitive in the beverage industry, they wouldn't take the time to converse with me, but people in like the chips industry or like that, that category, it was much easier to get information out of them and then maybe they had a buddy who, you know, did distribution for drinks that I could connect with.
Kara Goldin 19:06
But I really focused on that in the early days of figuring, you know, that whole world out once in a while we would have in the first couple of years, people reach out to us, maybe they would see us at an event that we were doing and that was a longer story. But that was kind of how we really grew the brand because I was self-financing the brand the first couple of years. And, you know, I didn't I didn't, I not only understood pretty quickly that, of course, I understood we were launching a new product. But I didn't realize when I launched that we were launching an entirely new category, which was called unsweetened flavored water.
Kara Goldin 19:45
And, for anybody who's launching a new category in any industry, the biggest challenge that you have is that your consumer is behind you. They don't understand what you're talking about. And I had really two consumers, I had the regular consumer who, you know, would drink the product. And then I also had the grocery buyer who was kind of our gatekeeper to getting on the shelf. And so, we spent a lot of time getting it out into, you know, different events that were health related, whether it was like a fun run, or breast cancer walk or something like that.
Kara Goldin 20:23
And so once in a while, people would reach out to us and say, oh, my local store doesn't carry your product, is there any way I can buy it? So our direct to consumer was, like, fair in the early days, but it wasn't really there. And, you know, it was expensive to get a case. And, and, you know, we ended up basically breaking even because we felt bad charging people so much money for shipping.
Kara Goldin 20:46
But anyway, so that was like the first few years, I still didn't believe that there was a direct-to-consumer capability for our product, which is kind of ironic, considering what I did before. But you have to remember that, that Amazon, you know, wasn't doing grocery at that point. I mean, they, you know, Jeff Bezos was one of my clients at AOL. I mean, he was just doing books in the beginning. And I had actually lived in San Francisco. I don't know if you ever remember hearing about web ban, and web ban. I'm in my house. And I love
Michael LeBlanc 21:22
Yeah,
Kara Goldin 21:22
Right and.
Michael LeBlanc 21:23
They set fire to a big pile of cash, those guys.
Kara Goldin 21:25
Yeah, but most people did not believe that the category of you know, perishable goods, and even ones that had a little bit longer shelf life was possible. So anyway, the net of it is, is, is we knew that maybe one day it would happen, but we didn't know how it was going to happen and instead, we were really focused on building in stores and wholesaling out, we didn't have our own store or anything like that.
Kara Goldin 21:52
But the kind of, some of the key points for us in terms of growth was a few years in, I actually got a call from Google and there was a guy there, Omid Kordestani. He used to work with my husband, and at Netscape, and he wanted to hire me to do something kind of similar to what I had been doing at AOL and he didn't know I had started this crazy beverage company, but you know, when I went down to meet with him at the Google offices, he, he said, you know, really wanting to do this, and I just, like, felt bad that I was having this conversation with them and kind of wasting his time, because I wasn't going to give up on Hint yet.
Kara Goldin 22:33
And so, I, I, you know, was, owned, that, what I had been doing and grabbed a bottle from my bag and showed it to him and he said, gosh, he's like, that's so cool. He was like, how did you have the courage to go start a beverage company, I mean, you're, that's a totally different thing and I said, well, I don't know. You know, like, we'll see what happens, but I still want to give it some more time and I figured it's, there's never a great time. And that's when he looked at me. And he said, you know, it's so interesting. We're, we're hiring chefs at Google to bring in food into the Google headquarters, because we figured out that there's not enough restaurants around us to basically service the employees.
Kara Goldin 23:16
So, I'm wondering if we could have, you know, Hint, like, drinks here and maybe, like a little bit, like, a little bit of him was feeling bad for me like thinking, hey, I got to support her. She's a friend and, you know, whatever. It's like a drink and
Michael LeBlanc 23:32
Got to drink something, so what’s this?
Kara Goldin 23:34
So, let's write within a week, they reached out to us at Google, and they ordered 300 cases. I was like, Wait, how much do you guys’ plan on ordering because I don't have that much in my garage. Fast forward a couple of years. I mean, we were the only beverage at Google as they grew. And we really kind of grew up in, in Silicon Valley and all of these offices and we, we became the largest beverage in Silicon Valley. And that really helped us with the stores because the employees in Silicon Valley would then go to the grocery stores.
Michael LeBlanc 24:12
And they were looking for the same product, yeah.
Kara Goldin 24:14
Right, they'd be like, why don't you guys carry him, we have it all over our offices. So, that was really how we ended up growing in stores. We didn't pay slotting. We didn't, you know, cuz they were getting requests for our product and then it wasn't until seven years later, have, you know, really running Hint that we became the number one beverage and grocery on Amazon very quickly. I mean, people, it was crazy how much product we were selling on Amazon.
Kara Goldin 24:45
And then they had launched the subscription program and that's when, Amazon Prime, and that's when we realized that it was just, I mean, it was really unbelievable and predictable. But the one problem was they wouldn't give us email addresses. And so it was, I guess, in many ways, sorry for the long explanation of this, but I think in many ways, it was, it was that moment when I saw and sort of knew what I was missing out of Amazon, because of my days in tech and having so much data.
Kara Goldin 25:25
And, you know, having those emails, especially, that I wanted that, and I thought, I'm the only way that I'm going to be able to get that is to launch drinkhint.com and it was also that moment, when Amazon, kind of, pushed back on us and said, you know, you don't get emails from Kroger, or Costco or Target or Whole Foods. So, why do you think you should get them from us and I was like, that is so true, I have no relationship with the consumer.
Kara Goldin 26:00
So, that, that's really how our direct-to-consumer started. It was, it was really, you know, not to be the cheapest not to compete with any of our retailers, but really to service the consumer. And, and, you know, really offer them everything we do. And we just would try it and see what would happen. And little did we know, you know how well that business would do.
Steve Dennis 26:27
So, Kara, let's, let's shift gears, or pick up a little bit, I loved what you were talking about a few minutes ago, about were kind of the state of direct to consumer in the early days of ecommerce were, I feel like I might have even met you at some point because I was at Sears back in the mid to late '90s and we were playing around with some of these shopping channel, kind of, kind of, kind of ideas and it's also your book was something I talked a lot about, but you sort of remind everybody that, you know, direct-to-consumer is not new.
Steve Dennis 27:03
Man, it was a mail order catalog that really kind of created that whole, sort of, sort of, framework. It's really, kind of, the digitally native brands that perhaps are the, the new business models. And with that I'm, kind of, curious, as you think about how Hint has evolved, do you see yourself really as, kind of, the old gangster, I think somebody called you, of D to C and digitally native brands, you know, more similar, you know, be thought of more in the terms of Warby Parker, Allbirds, those sort of brands or are you really a new wave CPG company that's like a lot of the bigger traditional CPG companies have now decided to go to record, does it not matter, is that the wrong way to even think about it?
Kara Goldin 27:47
Yeah, I think for us, we truly look at our brand as an omni channel brand. I mean, we have a store in San Francisco, we don't have a bunch of stores, but we have a store there. We you know, are available on Amazon still and then obviously we have our own direct-to-consumer business that, today, is about 40% of our overall business and we are in Costco, you know, Target, Kroger, all, all the stores that you can imagine, I think what's interesting about our consumer is it's not either/or, for our consumer, I don't know, if you ever go into a Costco, I don't go there often, but I probably go to Costco once a month still and so our consumer, when they're walking into to Costco, they will buy a case of Hint, they may still subscribe to Hint, but they will walk in, and they'll buy it because maybe it's a different flavor. Maybe it's, you know, an 18 pack, and it's a good deal.
Kara Goldin 28:48
So, again, it's, it, for us, I think we really look at all of the things that we do on direct-to-consumer as if we push people in to actually buy, but on our site at drinkhint.com we're not pushing people over to Amazon or, or even into other stores, like, you know, Costco or Target or, or whatever, but what we do know is that there's plenty of people who do shop that way. So, I think when you think about omni channel brands, and you know, I think for us, I mean, it's really, it is not an either-or situation because we know it always makes us feel a little bit uncomfortable because we know that these consumers even though, you know, maybe we're sitting here talking about cost of acquisition and lifetime value and all that stuff. It's very hard for us to measure that, Joe, you know, buys our product, maybe he's in the Google offices drinking some of our product, but then he's also walking into Costco over the weekend and see a great flavor. That stuff we can't track.
Steve Dennis 29:59
So, do you have a view, this, I guess, is more, not only you're having been at this a long time, but you know, there's so much press coverage, particularly lately, as some of these brands IPO or raise a bunch of money where you've got companies like Nike, you know, which is, you know, as a wholesale brand largely is really focusing much more on direct to consumer, you've got the digitally native vertical brands that thought they could build big brands online, only that are now investing heavily in stores, you've got this debate. I don't know, if you saw some of the research that's been out there around profitability between going wholesale versus going direct. Is there. Is there any, you know, other than that, you know, it's good to be omni channel, the attribution thing is really difficult, but do you have any general advice for people, whether they're sitting at a CPG company, or they're sitting at one of these digitally native vertical brands about how to think about that balance between wholesale, direct and what kind of factors to focus on?
Kara Goldin 31:00
Well, I think that the challenge for any brand that is going into stores, you know, just take a relationship with Target, for example, or Whole Foods, there's, there's a person, there's a person who's a gatekeeper that is going to tell you, maybe you get a trial at one of these stores, once you actually start to be able to show some sort of traction, it's a real estate deal. And so, you have to be, you're going to have to come up with funds to pay for that shelf space in our category. You know, Coke and Pepsi, pay millions of dollars, when we start getting to a level of the sales per square foot from Hint are equal or greater than some of the brands that some of those big guys carry. You know, they're like, the retailers would sit here and look at us and say, why should I not take the money, if, if
Steve Dennis 32:02
No.
Kara Goldin 32:02
You know, and, I mean, I can take that money today and then I don't really care, what sells, I, like, minimize my risk and so that conversation for us was, not only did we have the upfront money we had, you know, we basically wanted to minimize our risk. And we thought it was the best thing for retailers to do, but it's kind of ironic, when you think about it, that the idea of what people put on the shelf, these buyers put on the shelf, if like, if they don't sell you think well, after a while, do consumers actually show up at those places or, you know, what happens, right. What happens if Pepsi doesn't write you a check next year for this, well, we'll worry about that then and it was this very frustrating thing that went on.
Kara Goldin 32:54
So, I think what happens to a lot of brands is that, maybe they go and start out online and then they think, okay, well, I'm going to go get this thing going with, you know, one of these big retailers because they're going to give me space. What they don't factor in, is that once they've got you in the retail situation, you're going to pay slotting and you and can you actually look at your business model and say, it's more cost effective, or that's where my consumers going. So, that's what I need to do to do that, versus, you know, just doing it digitally native.
Kara Goldin 33:00
Then again, the other problem that's going on right now, obviously, is there's just too many direct-to-consumer brands out there. So, let's say you, you know, sort of jumped on the bandwagon and COVID, you know, really hit you hard, or hit your brand hard, and you were too reliant on some of these stores then you think, okay, well, I got to go get on Shopify, and do my, you know, store or whatever, you still have to pay Facebook to acquire customers and Google or however you're going to do it and those prices have gone up significantly. I think that the one thing that I'll leave you with that I thought about and I, you know, a lot of people have said to me, God, you've been in it for a long time, you've been here for 16 years.
Kara Goldin 34:19
I think being able to take your time, and sort of not make stupid decisions about what you're going to do because you feel like they've got you by the throat, whoever that may be, is critical and I think that it's a negotiation to be able to, you know, when a big retailer said to us, hey, you know, you're gonna have to pay slotting or, or you're gonna have to give us product for free or you're out. We, you know, we call their bluff. We just said, we're okay, I guess we're out because we can't afford it and then they never kicked us out because they were you know, and they were like, well, you're lucky, we felt bad for you. Okay, so what, I mean.
Kara Goldin 35:03
So, I think there's, there's a lot of that stuff that goes on where if you have time, I mean, this is sort of a life lesson, right, like, it's like, if you don't feel like you're backed up into a corner, there's a lot of stuff that you can do that will help you to survive, but I think it's a crazy time to be a digitally native only brand today because I do believe that consumers are looking at different opportunities and you know, different ways to shop, but if you are a, you know, store only available on store shelves, given sort of what we've seen over the last 18 months, it's hard it's hard to predict right now to what's the, you know, there's just a lot of different levers and if you don't understand it's, it's a, it's an interesting, it's a really interesting time, but very difficult to predict a lot of those conversations around you know, what is CAC gonna be what is you know, all of that stuff is just really tough.
Michael LeBlanc 36:17
Right.
Steve Dennis 36:18
Yeah.
Michael LeBlanc 36:18
Well, listen, you know, what a great discussion that helps educate our listeners on a wide variety of things. And, and so our guest is Kara Goldin, founder and CEO of Hint, the book is Undaunted: Overcoming Doubts and Doubters. We've had a great discussion in and around that and we basically had a masterclass in how to take a brand into wholesale retail and DTC. Kara, thanks so much, where can folks go to learn more about, about you and, and maybe even subscribe to a great, a great beverage on their doorstep.
Kara Goldin 36:48
Yeah, so I'm all over social at Kara Goldin with an "I" and Hint is available in lots of stores, on Amazon and at drinkhint.com.
Michael LeBlanc 37:00
Well, fantastic. Well, thanks for joining us so much. It's great discussion and we wish you continued success and thanks for joining us on Remarkable Retail.
Kara Goldin 37:08
Thank you so much.
Michael LeBlanc 37:11
If you like what you heard, please follow us on Apple, Spotify, Amazon Music, or your favorite podcast platforms. So, you can catch up with all our great interviews, subscribe so that it just automatically shows up. Tell your friends and, and also new insights and new episodes will show up every week. So, tell your friends because that will help us share the word, the good, the good, the good wisdom. Now be sure and check out and be sure and check us out on our new YouTube channel, not so new anymore, we've got a couple episodes up there and just look for Remarkable Retail.
Steve Dennis 37:41
And I'm Steve Dennis, you can check out more of my work at my website, stephenpdennis.com or on Forbes or on Twitter and please check out my second edition of my book ‘Remarkable Retail: How to Win & Keep Customers in the Age of Disruption’. Available just about everywhere books are sold.
Michael LeBlanc 38:02
And I'm Michael LeBlanc, producer and host of The Voice of Retail podcast and a bunch of other stuff. You can find me on LinkedIn and learn about me on meleblanc.co All right Steve, great episode. Look forward to chatting again next week. Be safe and have a great rest of your day.
SUMMARY KEYWORDS
store, brand, Hint, Amazon, consumer, people, dtc, problem, Kara, product, bit, book, returns, retail, Costco, ecommerce, drinks, direct, big, podcast