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- [00:01]
A
In general, people tend to resonate more with a person than a company. Right. If it's coming from a company, it's a bit inauthentic. And, you know, I'm really going to try to stay away from saying, hey, our solution is the solution. I really just want to educate, right. I want people to be able to look at, you know, something that says industrial compostable only and realize that's not great. Right. You know, they need to know what to look for in order for companies to, you know, make the switch.
- [00:30]
B
Welcome back to another episode of Builders. As always, this show is brought to you by Frontlines IO, Silicon Valley's leading B2B podcast production studio. If you're bringing technology to market and want to learn from your peers, we have a library of more than 1200 interviews with Venture backed founders and marketers. Where they talk, all things go to market. Of course, if you want to launch your own podcast, we offer podcasts as a service to more than 80 tech startups. The idea there is very simple. You show up and host and we do everything else. Now with all that said, let's jump into today's episode. Foreign. Baxter, founder and CEO of PlantSwitch. Dylan, welcome to the show.
- [01:10]
A
Thank you for having me.
- [01:11]
B
Let's jump right in. So you recently opened a factory in China, a massive factory. Talk to us about what that was like.
- [01:18]
A
It was a crazy experience. So first time I went to China was early 2024. And then we basically right after that happened, ended up winning a contract, Walmart. And we didn't even have a production facility at the time. So within about four months we were supposed to deliver 25 million units. And we didn't have a factory. So immediately got on a plane and flew to China and 45 days later we had a factory up and running. So it's pretty amazing how quickly things can happen over there. And it was a great experience. Once we got it up and running, we kind of kept building the team over there more and more. And the more that we did that, the more I liked it and wanted to keep, you know, building capabilities over there. And before you know it, we kind of had a full R and D team there. We've kind of moved most of our development and operations over there. And yeah, it's just been a great experience for us. So now it's a 300,000 square foot facility. We're fully vertically integrated. We have all sorts of different technology applications coming out of that facility. As far as plastic alternatives go, I don't think there's anything like it in the world. It's, it's a pretty unique and it's special place. It's really cool.
- [02:24]
B
Lot of questions there that I want to unpack, but maybe let's just give the listeners a little bit of context. So what was that order from Walmart? What were they buying?
- [02:31]
A
So forks. So they had a mandate for home compostable forks that go into their single serve salad bowls. So if you want to go take a salad bowl from Walmart, you know, eat it on the run, you need a fork inside of it. And they had a mandate that it needed to go to home compostable, which is for people that don't know. Basically it has to compost in a home environment and that's pretty much doesn't exist. Everything that you may have seen labeled compostable has to go to a special facility. It has to be exposed to high heat in order for it to compost. Home compost means you can basically just throw this in your backyard compost and it's going to go away in less than six months. So very few products on the market that can meet that criteria. And it was just kind of a perfect storm where they had said, hey, this is what we want. We came in and we were by far the best option at by far the lowest price, which is kind of what we built our business off of. And you know, we're fortunate to win that at a critical time for the company. And it was one of those things where it was a blessing and bit of a curse in the fact that typically you kind of like to have, you know, nice ramp up when you start getting into the market. We just went for the top and had the biggest one right out of the gate. So a lot of pressure on executing that and getting that done on time. But our team did a great job and we delivered and you know, we made about 100 million forks for them last year alone. So pretty cool.
- [03:52]
B
I mean, you probably consolidated a lot of pain into a very short period of time. So in the end that's probably better than having it spread out over a few years as you work your way towards big deals like that.
- [04:02]
A
Trial by fire at its finest, I'd say.
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B
How did you get Walmart to give you that chance knowing that you didn't have the production capacity yet?
- [04:10]
A
We did a great job of outlining the plan and our team had experience doing it and so we were able to say very confidently, like, here's the timeline, this is exactly when this is going to happen. And everything that we Said we hit on the timeline. So a lot of faith put in them. And really, a lot of that was driven by Taylor Farms, who is actually the manufacturer for the private label brand. So you have to give a lot of credit to them. And specifically Lisa, the head purchaser there, on saying, you know, this is such a great technology that I want to take this chance that, you know, they'll be able to execute it, and I believe that they will. And that trust was amazing. And it worked. And we brought her into the facility later that year, and she was pretty blown away. So that was a cool moment.
- [04:55]
B
What did it feel like for you the first time walking through that facility?
- [04:59]
A
I mean, pretty surreal, surreal, especially in the sense. So we had a factory in North Carolina that was a pilot facility. So we had similar kind of setup to what was done in China originally. It just was a little bit smaller. But it took me probably close to a year to just get the pilot equipment up and running in North Carolina and millions and millions of dollars, all sorts of development. It was really a brutal process. And then to go immediately to China, scale up much quicker with greater capacity in 45 days literally was just unreal. I went, I visited the building that we put all the equipment in. It was completely empty. And then I come back, like 30 days later, and everything is done. We're commissioning the equipment. The equipment gets commissioned like that. I couldn't believe it was such a different experience from what I had in the US by almost an order of magnitude that, like, I didn't know if I was dreaming or if we actually pulled that off.
- [05:59]
B
I mean, 45 days is just absolutely insane. Like, is that even possible in the U.S. can anything get built that fast? Can, like an ADU or a shed be built in 45 days?
- [06:09]
A
No, just not really relatively close. I mean, to give you an idea, in the US we had to increase power. We had to get all sorts of permitting. We had to build up all these safety features, which were quite expensive. Redo wiring, the lead times for things like transformers and wiring, six months plus, if you're lucky, we had to pull strings to even get it to six months. And China, we said, hey, we need more power to the building. And they called the neighbor and it was there the next day. You know, it's literally like that. It's the craziest thing.
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B
Let's talk a little bit about your technology. How does that work? Can you explain it to us perhaps in simple terms?
- [06:46]
A
Yeah. So most basic way is we have bacteria in basically a big tank, feed it an energy source. And the bacteria basically creates a polymer and plastic is a polymer. Our product is what's called a biopolymer because it's made from bio direct sources. And then out of that polymer, there's stuff around it. We clean it off and then we blend it and make a proprietary compound out of it. And then that raw material is what we call compost zero. That's a finished resin that can then go into production and be turned into a fork, a knife, a spoon, bowl, tray, cup, you name it. So our process is vertically integrated. We go from the raw material creation all the way to the finished product and then sell that into the market, which is very unique. But we think that that's really important to help control cost. And also it helps us develop and control quality a lot better too. This is a brand new material and you know, if we were to just go sell it to a big manufacturer, they probably have a lot of issues, you know, getting it up and running it consistent. We have a lot more expertise than that.
- [07:50]
B
And did you want to be vertically integrated from day one or did you view it as kind of what you were just saying there as like there was no other option, it was the only way.
- [07:56]
A
No, no. I mean, it's funny, I can say it now. I raised money off of the idea that we would just create the material and then we plug into supply chains. Right? Because no investor wants to invest in this complicated, vertically integrated, expensive thing to scale up. So, you know, we had the direction from investors, hey, like, you know, you got to pick a lane. We said, great, we're going to make the raw material. We're going to work with the big manufacturers of food packaging and we'll sell them it, and then they'll sell it to their customers. And it sounds great on paper. It doesn't work in practice. And there's a lot of reasons for that. Some are technical in that, you know, it's harder to validate the material. But we actually got past that threshold with big manufacturers. I think the bigger insight, and one that I tell anyone who will listen in similar spaces, is that if you sell a new material to a manufacturer, they still have to go sell that to the customer. Right? And who is going to be better at selling that material to the customer? Is it going to be the legacy manufacturer who's been selling plastic for 50 years, or is it going to be the young innovative startup where that's our life, Right? For them, it's like, oh, great, maybe I get a sticker at our annual meeting for driving this for us. We have to do it to survive. And so it really is more at the point of sale than it is anything else. And I firmly believe that we're going to sell our product and our material better than anyone else. So we're still open to partnership. It's just we haven't seen it come to fruition the way that it looks good on a business plan. It's you kind of have to get in the weeds, you have to get dirty, do it yourself, and then come to the customer with the finished solution. And once we started doing that, that's when we start seeing a lot of traction and product market fit with the business.
- [09:41]
B
This show is brought to you by Frontlines Media, a podcast production studio that helps B2B founders launch, manage and grow their own podcast. Now, if you're a founder, you may be thinking, I don't have time to host a podcast. I've got a company to build. Well, that's exactly what we built our service to do. You show up and host and we handle literally everything else. To set up a call to discuss launching your own podcast, visit Frontlines I.O. podcast. Now back to today's episode. What else has been going on from a go to market perspective? What are some of the big learnings that you've had so far?
- [10:10]
A
So another huge learning was we almost got spoiled with the Taylor Farms and Walmart partnership, in which we were basically just making one product and we were making 100 million units of it, and we were able to just sell it direct to them. So it's kind of the ideal situation, harder to find those situations. So we had a bit more of our sales strategy around, hey, let's go find these great opportunities that are out there. And there's not that many of them. And especially once the tariffs hit and the trade war happened, big companies were a lot more hesitant to switch over supply chain. And so we had to pivot a little bit and to say, okay, as opposed to doing that, we need to build out a whole product catalog and then we need to sell that into smaller businesses. Distribution. We have a partnership with Live Nation this year where we're supplying their straws and cutlery. So that's kind of more of the target client that we had to shift to and then selling through distributors. So if we were to just sell them a straw, that's not interesting. No distributor wants to just have one straw in their warehouse. We had to put together straws, cutlery and cups and all forms and variations of those in order to have a Full catalog. That's compelling. So definitely a different sale, definitely a different product strategy that we pivoted to really at the beginning of last year, kind of once the trade war started happening. But we're seeing the benefits from that now where that side of the business is starting to take off in more of an asymptotic way.
- [11:33]
B
Let's talk about straw quality. That's a pet peeve of mine when I get these straws that like disintegrate before you can finish them. What are we talking here?
- [11:40]
A
Yeah, so these work like traditional plastic straw. These aren't going to fall apart in your drink like paper. You can bend them. You know, it's a thermoplastic material. It's not plastic, but it is a thermoplastic. And so the performance that you get, you know, people are always commenting, oh my God, this is like plastic. And I'm like, yeah, that's kind of the point. I'm a firm believer that for sustainability you shouldn't have a drop off in quality. You shouldn't be like, you know, I want to do the right thing, but I guess I have to sacrifice this, that or the other. In a perfect world, you have a product that is the same quality or even better. And that's what we focus on. Plan switch. Even for, you know, the Walmart Taylor Farms opportunity, this is one of our forks here. The feedback was pretty consistently that, wow, this is actually a lot better than the plastic fork that we had quality stand. So that's what we like to hear and that's what we shoot for.
- [12:29]
B
You touched on the tariffs, which I imagine were probably fun to navigate. What about just in general navigating and I don't know if this is the reality for you, but a lot of the sustainability founders I know, a lot of the climate founders I know, they say that it's not cool right now to kind of be in sustainability. And they've had to pivot their messaging and they've had to layer in. It's not just about sustainability. It's also, you know, better margins or it's more profitable for you. What are you seeing in the market? Is sustainability still cool? Like, is that still resonating? It sounds like with Walmart, at least it is. Are you seeing that in the wider market?
- [12:59]
A
Yeah, for sure. And I think that plastic is a bit more of a universal issue. Right. I think everyone understands that we shouldn't be throwing plastic items into the environment. That's not really controversial. There's also a lot of things coming out about microplastics There's a whole documentary on Netflix about to come out that I think will generate more buzz. It's a bit more of a universal thing that people just get. You don't really have to sell that too hard. But it also goes back to what I was saying with you don't want to have trade offs. And so, you know, people don't want to switch to a sustainable option. And it is a lot worse experience. And we don't provide that. We provide, hey, this is high quality, this is high performance while still giving you the sustainability and zero waste benefits. So I think if you could do that effectively, then sustainability is still cool. It just has to be, you know, the right messaging and it has to still be good quality price wise.
- [13:53]
B
I know you mentioned that you came in much cheaper than the competitors. On the sustainable side, how does this compare price wise to unsustainable products?
- [14:00]
A
So we're still at a premium to traditional plastic products, but we really compete against the alternatives. You know, pretty much all of our customers have said we're not going to use plastic. Just doesn't fit what we do. And so we're not really competing against plastic pricing. We're competing against, you know, what does a paper straw cost? And you know, we're very competitive with any of those other alternatives. And we're a higher quality product with a better sustainability store too. So we do a pretty good job when we're competing against plastic Ultra.
- [14:29]
B
What are the other alternatives out there? Like bamboo would come to mind. Paper, what else? Or maybe put it in the buckets. What's the competitive landscape look like if you were to put it into a chart?
- [14:38]
A
There's basically two buckets of competitors. There's the paper and then the wood. So like paper straws, wooded cutlery. And I put that at the bottom tier of quality. Everyone hates paper straws. No one wants wooded cutlery. Every time someone tries to put it into their supply chain, they get customer revolt every single time. So you know, that's a bad product. We don't worry about that too much. The other bucket is the greenwashing bucket. So there's a whole product category out there that's labeled compostable or labeled industrial compostable. And in theory that's nice. If that was to go to an industrial facility and get composted, that would be great. Doesn't happen. And so if that product goes into the environment, it's still going to last a hundred plus years and it's still going to cause microplastics. So you have this whole bucket of products where companies are paying double for this sustainable messaging and it's not solving any sort of stable problem. And so that is where we pee a lot is those legacy products where it's really greenwashing and we're competitive price wise, we have a better sustainability story. So we're rapidly eating market share from that category, which is not only good for Plant Switch, but good for, you know, the world and environment as a whole. And so, you know, our goal is to really keep attacking that market and make sure that, you know, we're replacing those products that are a little bit misleading with something that's true to the messaging is truly biodegradable in natural environments. This show is brought to you by the Global Talent Company, a marketing leader's best friend. In these times of budget cuts and efficient growth, we help marketing leaders find, hire, vet and manage amazing marketing talent for 50 to 70% less than their US and European counterparts. Part to book a free consultation, visit globaltalent.co.
- [16:31]
B
where do you go from here? What's top of mind when you think about the next year or two?
- [16:36]
A
So throughout the rest of this year our goal is to continue executing on that distribution strategy. So building out our product catalog, we have a lot of products that are coming out throughout this year that are going to be really nice and compelling additions to what we currently have. And now that we've built out that distribution network, it's a lot easier to just get penetration for those products and sell them to our existing, existing customers. So big focus this year is fleshing that out. Looking beyond that, we have a lot of opportunity to go into other industry verticals. There's a lot of other industries where plastic needs to be replaced. And you know, it's tough because you get a lot of these opportunities and inbound inquiries and you have to say no to a lot of them right now because you can't be everything to everyone. But the longer term vision of Plant Switch is not a food packaging company. Right. It's we've developed this unique material that can be used across all industry verticals and we just have to be very thoughtful and disciplined about which ones we go to in a cadence, which we do.
- [17:36]
B
So what does the data say about the sales of products that do have this sustainable messaging? So obviously, you know, Walmart, that's good for them to have sustainability there, but do they see an uptick in customers buying it because it has that message as well.
- [17:50]
A
We don't have customer specific data on that. You know, there's Polling data. And generally, you see about half of consumers are willing to pay more for sustainable packaging. Depends on the study and how you ask the question. But pretty good numbers, like 50% of people are fine to pay more for sustainable packaging.
- [18:10]
B
Is there hard navigating this world where there is so much like greenwashing? The other day I was telling my wife, like, our daughter, she got some, like, box of candy from school or something, and I was looking at it, and it was like, animal crackers. And, like, in huge letters, it's like, no high fructose corn syrup. And then, like, you look at the back, and it's just like, garbage, garbage, garbage, ingredients. Like, that was their message. And I was thinking, like, if you're a consumer brand who's selling like that, you actually have a healthy product. Like, it's hard to stand out. They're already kind of attacking that, even though it's bullshit, like, they're attacking it. So how's that for you? Just navigating where many others are probably just kind of full shit or they're manipulative in how they're messaging it.
- [18:46]
A
Yeah, that's one of the hardest things that we deal with. And, like, on one side, you have the companies and the products that are greenwashing and mislabeling, and then on the other side, you have the legislation that's trying to prevent that from happening but isn't aware of other alternatives. And so they just take a broad stroke and say, oh, you know, if it's labeled compostable, then it can't be X, Y and Z. And it's not that being compostable is in and of itself bad. It's that they've misled the consumer. Right. And so, yeah, it's a tough thing that we have to navigate. I'm a firm believer that at the end of the day, the best product wins. Right. And it's now our job to tell that story and educate the broader audience of why this is a truly good product, why that other product is not. And then hopefully, that message permeates throughout the market.
- [19:34]
B
What are you doing to educate the market? You know what's working? Of course, you're on podcast. But besides podcasts, what else are you doing to educate the market?
- [19:42]
A
A lot of our work has been more just B2B. So educating the buyer directly. Another big initiative for this year is getting the message out to the broader public. We hadn't really had the catalog and distribution available to do that until now, so now it becomes kind of one of my primary objectives. Is okay. I need to kind of build a platform to where I can start educating more of the, you know, average person of plastic is bad. Here's what works, here's what doesn't work. This is what we have to offer. So I'm excited about that. I think that's going to be a fun, you know, project or initiative this year and I look forward to, you know, hopefully having some interesting conversations with a lot of people.
- [20:23]
B
So you're going to be like the Brian Johnson of plastics?
- [20:26]
A
Yeah, yeah, sure. Maybe with a bit different messaging, but sure.
- [20:31]
B
But I mean, on that level, right, of like really going out and making yourself the face yourself, the message, like, are you going to go down that path?
- [20:38]
A
Yeah, I think so. I mean, in general, people tend to resonate more with a person than a company. Right. If it's coming from a company, it's a bit inauthentic. And, you know, I'm really going to try to stay away from saying, hey, our solution is the solution. I really just want to educate you. Right. I want people to be able to look at, you know, something that says industrial compostable only and realize that's not great. Right. You know, they need to know what to look for in order for companies to make the switch. So, yeah, I mean, I think there's a lot of good work that can be done there and hopefully, you know, comes to fruition and people start learning.
- [21:13]
B
So that's one big initiative or priority. What else is top of mind from a growth perspective?
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A
I mean, there's obviously the B2B growth, so continuing to grow. We had a lot of momentum with national accounts prior to the trade wars, and then a lot of procurement cycles just got put on pause. And so now that things are stabilizing, I think we have some really exciting partnerships that just need to get to market. And once that happens, that kind of turns the funnel of raising awareness for everything else that I'm talking about. So, you know, getting that over the finish line this year would be really exciting. And I think now that things are a little bit more back to normal, we'll start to win some of those bigger opportunities.
- [21:50]
B
And you've touched on that a little bit. But let's just end it on a strong note here. The big picture vision. So take us 10 years out. What does this look like?
- [21:57]
A
Yeah, 10 years out. PlantSwitch has established itself as the company for plastic alternatives across multiple verticals. So food packaging, we have our entire food packaging portfolio that people know is the gold standard for plastic alternative. We're in other industries doing things like cpg, packaging, cosmetics, even medical, agricultural. And so, you know, putting this truly biodegradable and sustainable product into the world as a direct alternative to plastic, it becomes, oh, you know, if we want to do something sustainable, we know exactly where to go and plan Switch has set the gold standard for that.
- [22:32]
B
All right, awesome. And well, we are up on time, so we're going to wrap here. Before we do, for those who are listening in that want to follow along with this journey. Where should we send them? Where should they go?
- [22:40]
A
Yeah, please check out our website, plantswitch.com. you can get in touch with us there. Additionally, I'm on LinkedIn. Dylan Baxter X will be posting some Instagram and TikTok content as well to follow along. So, yeah, I'm really going to be pushing the message this year and hopefully people follow along and enjoy it.
- [22:56]
B
Amazing. Love it. Well, that's all for today's episode of Builders, brought to you by the Frontlines. If you want more amazing content like this, visit Frontlines IO, where you'll find a library of more than 1500 interviews with founders, marketers and other GTM leaders, where we unpack the tactical lessons from their journey. And of course, as always, if you do want to launch your own podcast, we'd love to have a conversation with you. Visit Frontlines IO Podcast as a service. Mention that you listen, mention you love the show, and we'll give you a 10% discount. Thanks for listening. We'll catch you on the next episode.