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DTC Podcast
Ep 473: From Bankruptcy to Profit in One Year: Dan Crosby’s Strategic Relaunch of BioSteel
00:43:26
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- [00:00]
A
One of the biggest hurdles that we had with respect to retailers in the beginning was BioSteel left them without paying their bills. Some channels or some retailers were left holding the bill. They weren't exactly knocking down our door to carry the product again. And I wanted to really take my time to develop our strategy so that I was making the right choices. For every dollar that I spend, what's the penetration that I can get for the brand? Is there some sort of analytical data that I can tie back to the success of this partners and that was something that plagued the previous ownership is there was never anything about hitting KPIs hitting certain ROI targets and that's not how I operate. Coming from the e commerce world, Whenever I spend $1, it's easy for me to set a KPI of getting 10 back.
- [00:54]
B
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- [02:52]
A
Yeah, yeah. So literally five days ago, or maybe like four days ago, I, A year ago I took over the ownership of BioSteel. And I want to say, I don't want to mislead people. I didn't take over the business. I, I purchased the assets out of bankruptcy. And you know, essentially the reason why the brand went bankrupt was for a few things. You know, overspending, poor forecasting, potentially not the best choices of endorsements, you know, for various things. Right. They were.
- [03:29]
B
And to be clear, it was losing somewhere in the neighborhood of $15 million.
- [03:31]
A
A month a significant amount of money. Significant. Yeah. I don't know. I don't remember exactly what the accurate number is, but it was, they had spent well over $400 million over the course of around three years. And they were not making, they didn't make that amount of money in four, in that three year period. So they were spending way more than they were making or even, even bringing in. Right. In terms of revenue. And then one of the major issues with the brand was its logistics. So I don't know what was going on here, but they, it's almost like they tried to adopt almost like an Amazon model or maybe a bigger, you know, retail brand model where we're going to, we're going to spread our inventory out over, you know, a dozen distribution centers across North America. But in order to do that, we have to make X amount of inventory to supply all of those DCs. And in order to do that, well, we're gonna have to assume or forecast that we're gonna be pulling in X amount of revenue and moving this amount of units. And they just blew their brains out in order to try to do that. And that has been by far the biggest hurdle that plagued the turnaround over the course of the last year is consolidating that, the, that monster of inventory and consolidating DCs and things like that. So over the course of last year, you know, it. Wrangling in and consolidating that, the, the, the logistics of this business has been by far the biggest task that we've had.
- [05:14]
B
But that's your benefit. They spent. So they blew their brains out on marketing to fulfill this giant vision they had. And that's such a great smart move on your part to recognize that they built this brand to this size.
- [05:25]
A
Yeah.
- [05:26]
B
Did you know that this logistics problem, number one problem plaguing the business when you took it over.
- [05:30]
A
Yeah, because I could see, you know, when I had the data room. Right, they give you a data room with all of the information about what's going on. I could see that there was just tons of products scattered all over the, all over the place. Like when I say North America, like there was warehouses from California all the way to like, you know, Quebec or whatever. Right. So a vast, you know, stark, you know, just, just everywhere. Just everywhere. And yes, I could see it. But what I didn't realize is a few things. Number one, the, just how much it actually was. There was like, you know, arguably 20 something thousand skids scattered across North America. There was stuff that wasn't properly inventoried and you know, I guess looked after. So there was like, there's, there's still stuff that pops up here and there every once in a while that we didn't even know we.
- [06:26]
B
Do you think they were doing it just because they were trying to go so big? Is it they were just trying to be like, boom, we're everywhere, like. Or was it just a miscalculation because they ran a previous business that way or something?
- [06:38]
A
Yeah, I think it was a combination of a few things. I think it was like what you mentioned, I think the goal was like, hey, we're going to be the next Gatorade. And if we're going to be the next Gatorade, we have to act accordingly. And this is the Gatorade playbook. So we're going to adopt the Gatorade Playbook, which was the wrong move for sure. And, and then it was, in order to do that, we have to scale extremely quick. And by scaling extremely quick, you know, you may or may not have the right people on staff to be able to do that or to be able to, you know, handle such scale or, or the right people to implement the right types of procedures and standard operating procedures and, and things like that. And, and you know, there's, there was just a lot of things that were, you know, half assed done and it's been that where that, that's produced the, the most amount of headache in the, in the brand and it actually wasn't, you know, the marketing that, that wasn't the most difficult thing. It wasn't you know, reestablishing retail partnerships because the brand was, is in, it was and still is very relevant. It still pulls off the shelf. It's still a successful brand. You know, is it doing as well as when it had, you know, nine figures worth of, you know, marketing spend per year? No, but is it top line, bottom.
- [08:03]
B
Line, hell of a lot better?
- [08:05]
A
It is, yeah. So I'd argue that this is probably the first time the brands actually turned a profit in probably a few years. Easily.
- [08:11]
B
Yeah.
- [08:11]
A
So at least in terms of the. All of the data that I assumed in the deal, this is the first time the brands turned a profit since. I have relevant data dating back to what I was able to see. And I'm okay with that. I very much know that in order to restructure the business, we had to take 10 steps back and then we're slowly starting to take our steps forward again.
- [08:39]
B
But the brand equity has not, has only been built during this time. Or maybe it's only plateau. Maybe it's come a little bit less available. Has that been the outcome of having to rejig this whole system?
- [08:49]
A
For sure, for sure. It's been, it's become a little bit less available. It's been quite a bit less available in the US and reason being is because the US is very different than Canada. The US distribution model, the Canadian distribution model is very kind of consolidated. You know, we have one distributor across Canada that deals with, you know, the specialty channel, for example, like GNCs and Popeyes and Whole Foods and things like that. They deal with that across the entire Canadian country. Whereas in the US it's very segmented. Right. So before BioSteel alone had, you know, upwards of 250 distributors in the US and that's just, that's an animal that is just almost like impossible to maintain and even keep your hands on, especially with a small, efficient team like what I like to run with. But in Canada, we're still very well distributed. We still have pretty much every, you know, major channel, major retailer that still carries our product. One of the biggest hurdles that we had with respect to retailers in the beginning was BioSteel left them without paying their bills. So, for example, you know, when we're having calls with certain, you know, even, you know, gas and convenience, a lot of people are like, why aren't you back in certain gas and convenience? It's because they were shortchanged their bill like, you know, you know, which I didn't even realize. So, for example, gas and convenience, even retail, it's kind of a pay to play scenario, right? Where, hey, you gotta pay for rebates. You've gotta pay for, you know, anytime you see, you know, say you go to Circle K and you see a 3 for 6 deal, but the regular price of that product is, you know, say eight bucks for two of them. You have to fund that difference of $2. Well, the problem is when I assume the business, it went bankrupt and some channels or some retailers were left holding the bill and they weren't exactly, you know, they, they weren't exactly knocking down our door to carry the product again. Right. But now, because it's still performing and a lot of people didn't think that this brand was going to be able to come back so soon. Now they're coming back and they're like, okay, you know what? We're seeing what you're doing. We'd like to, we'd like to have you back. So now they're realizing, okay, you know what? I can't be expected to pay for, you know, the sins of my father, for example. So they're like, you know what? We're just going to, we're going to move on from that and let's get you back in the stores. So there's been a lot of that, but in the States. The States is just a different animal because unless you're on the Coke and Pepsi trucks in the States, you're being distributed through the beer network and it's a very fragmented system. So will we be back in the States? Yes, we're still back in a few distributors down there, but for the most part, we were focused very, very early on on the Canadian business, which has always been the biggest part of the business. And then now we're starting to go heavy into the States because we've got production nailed down, we've got distribution nailed down. I handle all of the logistics in house. We do our own warehousing, we do our own fulfillment, we do all that stuff. In January, we're going to start manufacturing in my own facilities. So, yeah, so we've got a lot of things going on for sure.
- [12:06]
B
Because you. Because for those that may didn't listen to the first podcast, your protein business was what you, what you cut your teeth with and still, still dominating. And so that's cool that you're bringing production in there. We have it. Will it be in the same facility?
- [12:19]
A
Yeah, yeah, yeah.
- [12:21]
B
Think of all that nutrition, protein and electrolytes under one roof. Just so healthy.
- [12:25]
A
It's actually a different facility. So I have two facilities down here. In Windsor. So BioSteel is going to be operating out of a separate facility than my Canadian protein facility. So we're going to actually separate the two. And the reason why we're separating the two is because the BioSteel facility is we're getting that facility NSF certified. So we have the audit on January 11th. And this brand being a very sports specific brand, I really wanted to maintain that NSF certification and that's really important to me. So we're only doing one facility. So anytime you add more and more regulations and certifications to a product, it ends up increasing the cost, naturally. And Canadian protein just, it's not necessary for it to be NSF certified, whereas the majority of professional leagues and players use this product and they require it to be NSF certified under their players agreement. So, so it's a natural. I have to do it.
- [13:20]
B
So Biosteel, you know, I'm a huge hockey fan and go Canucks and I. So Biosteel, that's one of the main reasons that I was, you know, hit with the most impressions of BioSteel. You did not renew or you didn't win. I guess the, the NHL deal. Talk about your affiliate, your sports affiliations and the way you've matured those or evolved those.
- [13:40]
A
Yeah, so I, I was hopeful that I'd be able to, you know, win back the NHL. It didn't happen. Yeah, but yeah, yeah, Coke and body armor scooped in and, and ponied up more than I was willing to, you know, responsibly pay for an endorsement. But it is what it is and, and you know, they're a multi billion dollar brand. So. So an endorsement like that does make sense. I haven't, I've heard that the, I've heard that the brand in the, in the Canadian market isn't doing so well because, you know, I don't think a lot of people like the brand, but.
- [14:11]
B
I bet players still have BioSteel in their, in their, you know, cups.
- [14:16]
A
I could tell you right now that the vast majority of professional teams and athletes still use a product for sure. And that has never changed. Yeah, so that's never changed. I was very hopeful though, to put that deal together when I was speaking with the NHL. They did feel like it was the right product for, for the league just by, you know, the authenticity of the brand, the fact that it started with, you know, Matt Niccol and being the trainer of the Leafs and, and there's that authenticity in an original aspect of the brand. And it's got its roots in hockey. So that's never left the brand. And all things aside from that, it's a great tasting product, which is over and above everything. That's why I did buy the. The brand is because it actually is a good product. It's. It was run very poorly, but it is a great product. And you can't build brands. Yeah, you can't. It would be very difficult to build a solid brand on a shit product. So to be honest with you, one of the, one of the perfect, the most perfect examples of what we're seeing is like with prime right now, right? So, you know, I don't want to throw shade on, on my competitors or whatever, but when you, when you have a lot of hype and, and you've got a lot of marketing dollars behind you, if your product isn't sound and it's not a great product, this is what happens. You have a very steep incline, but then you just drop off a cliff, right? So when the hype dies. Cause hype always dies. It doesn't live on forever, right? So you have to start with a great product for sure.
- [15:45]
B
How many months notice would you need to get in the ring with Logan?
- [15:50]
A
I think we talked about that, right, didn't we, before, or no.
- [15:53]
B
Maybe. I don't know. I don't know if they're into the fights yet.
- [15:56]
A
You know what, it's kind of funny. When I was in the office at Biosteel and I was going through just kind of some housekeeping or whatever with the people that were left on from BioSteel to help with the transition, I told those guys, I was like, once I fully take over, I'm going to challenge. I'm going to put up a big billboard in LA and I'm going to. I'm going to challenge Logan Paul to a fight. And you know, obviously I didn't do that, but he's quite a bit bigger than me too. But he's big boy. Yeah, he's got a couple of pounds on me. But, you know, maybe someday when the brand gets bigger, I would love to do that because as far as I was concerned, I'd be punching up, he'd be punching down right in, you know, that whole terminology, right? So if he accepted, you know, even if I got beat down, it wouldn't even matter. It'd still be great for the brand. So.
- [16:42]
B
And your product's better. So I think, you know, there you go.
- [16:45]
A
Right. But no, that was actually funny. It's funny that you brought that up because I actually did mention that to people.
- [16:50]
B
That's Hilarious. What? Yeah, what. So you mentioned obviously the distribution was a huge part of it. Paring down the partnerships. I think I see you ramping up the marketing with some of the stuff you're doing right now.
- [16:59]
A
That's right, yeah. Sorry, I didn't even touch on the part partnerships there as an example. So we're more so focusing on, you know, a lot of grassroots. So we've got great partnerships with the omha, Calgary Hockey oua, which is all the universities in Ontario, Canada west, which is all the universities west of Ontario. I've got a meeting next week with the Quebec schooling system. So Quebec actually operates a little bit different. Quebec, I didn't know this, but Quebec operates all the way from grade school all the way up to university for their athletics. So I'd love to nail down that partnership. But these are, these are the style of partnerships that we're going with and I wanted to really take my time to develop our strategy so that I was making the right choices. I didn't want to make the wrong choices. And the choices that I'm making as well is for every dollar that I spend, what's the penetration that I can get for the brand? And not only what's the penetration, but is there some sort of analytical data that I can tie back to the success of this partnership? And that was something that always had plagued the previous ownership is every single time. And I've seen all the contracts. There was never anything about, you know, hitting KPIs, hitting certain ROI targets. And that's not how I operate. Coming from the E commerce world, whenever I spend $1, it's easy for me to set a KPI of getting 10 back. So that's, that's such an important thing for me that I have to be able to see some sort of return. It can't just be like fugazi where it's, you know, we're just going to like sign on this pro athlete and like hope for the best. That's not how I can operate.
- [18:37]
B
Yeah, I feel like Canopy did a bit of that in the early days. I think that was their MO kind of thing for sure. How, but how specifically with. I love this idea of the, of these youth federations, all these ways you're kind of giving back to youth where it's. You're starting like a, like a biosteel academy or something as well. Did I see.
- [18:52]
A
Yeah, I was actually just there. I actually just came from there. I was there with Zach Cassian today.
- [18:57]
B
Oh, nice.
- [18:58]
A
Yeah, yeah. So he, so he's actually from the Windsor area. And he was, he was coached by Andy Paquette, who ran Powertech, which I'm part owner of as well now in Power Tech's like a hockey camp. But yeah, man, he was just like, man, I love what you guys are doing. I really want to check it out. And he's friends with my lawyer, who's also a partner on the academy. But yeah, man, it's grade six to 12, so it's a, it's a legitimate Ontario, you know, certified grade school and high school. You graduate grade school, you graduate high school. It's, it's a triple A hockey level and we play under the tier one elite league, which is our home league of play. And, and it's also sanctioned by Hockey Canada. So it's a really good, it's a really good program, man. Like, I mean, we're going, you know, we're going across the border playing in, you know, these, you know, Michigan and we're, you know, we're taking on Bell Tire, Victory, Honda, you know, Honey B. And, and we're beating them. So, you know, they're beating us or beat, we're beating them. And you know, they just, I think they just had a tournament out in Chicago and they came second in the tournament and you know, they're playing like all these serious teams like the Junior Kings, which is like funded by the, you know, the Kings and you know, even like the Sharks, like the Junior Sharks, which are funded by like San Jose and like, you know, the Nashville Predators have a, have a junior Triple A program that they're playing. They won the tournament. But like, we're, we're playing that. We beat them in the tournament. They are winning the tournament. But like we're playing, you know, these teams and for a first year program, it's, it's doing very well.
- [20:25]
B
That's wild. And so how do you know that these, that these partnerships are not fugazi? How are you, how are you seeing on paper that like, obviously ltv, I can see getting people young and getting them on the product and into it is a big part of it. How else are you sort of attributing value?
- [20:42]
A
Yeah, so for example, like the OMHA, right, they have 150,000 members as an example, we're using that as a KPI where if we send out a newsletter utilizing the OMHA's membership, we know exactly how many people that's reaching and what kind of, you know, KPI we can expect as a return. So for example, one of the ways is we have a sponsorship program where we're giving away, you know, around $500 worth of product to individual teams. So we're providing you with the water bottles, we're providing you with some product and giving you, you know, some, some team towels and things like that. Right. So as a result, when we, when we blast out these emails, we can find out like, how many people are coming through to get that product from a sponsorship starter pack and how many of them came through the OMHA from that particular email blast, for example. And then all the other stuff like, you know, helmet stickers. And when the OMHA puts on a tournament, you know, our vending trailer or our sampling trailer goes out to that particular tournament, we can calculate how many samples were actually provided at that tournament. And then we can roughly calculate, okay, if we sent out a thousand samples during that tournament, we can expect, you know, a 10% conversion rate because people are trying the product and it's typically a stronger conversion rate when you get the sample. So if at a thousand people, if there's 10% conversion rate on average, you know, we can expect 100 new customers. So, like these type of rough ideas, you know, as an example, and then we're actually transitioning our sponsorship program to a team management app similar to Game Changer and Team Snap. So I have one of my buddies, he's a software engineer, he's actually building out an app now. It should be done late February. So we're going to actually rope in all of these teams into a team management app that is better if not fixing all of the issues that people don't necessarily like on current team management apps, making it better. And it'll be completely free. You get an Automatic sponsorship with BioSteel. And we're trying to figure out a rev share program as of right now as well. So say, for example, Bower wants to, you know, advertise with us because we've got 10,000 teams in our team management app and we're sponsoring 10,000 teams as a result of it. However, many insights that produces and whatever those marketing dollars are from a team page producing those insights and Bowers paying for those insights as an advertising partner, we're going to rev share back to the team. So almost like as a, as a, as a funding mechanism for those teams to be able to help with team cost. So, you know, yeah, giving back to the community. And what we're going to be able to do too is we're going to be able to geolocate our advertising as well. So say, for example, like where are you located right now?
- [23:26]
B
Victoria bc.
- [23:27]
A
Victoria. So say you're, you're, you're located in Victoria bc. There is a source for sports out in Victoria BC near you. And you go on, you're managing your kids sports team that day or you want to find out when he's playing or whatever. You're going to get a fed and you're going to get fed an app for source for sports on either where to buy bio steel or hockey sticks or whatever. So we're going to be able to geolocate advertising. We're going to get like very granular with respect to how we're going to be attracting new customers, repeat business, things like that.
- [23:55]
B
So love the way. Yeah, that, that using technology to kind of facilitate community and partnership, creating a little sub business in a little media company in its own way where you can, you know, be partnering with other brands as well that are complementary.
- [24:09]
A
For sure. Yeah. I really wanted to, I really wanted to figure out, you know, ever since I purchased this brand, I really wanted to figure out, okay, you know, how could I marry a consumable CPG product with tech in order to scale this is, this was the best way that I could figure out how to do that.
- [24:25]
B
Super cool. What about the changes you made in marketing? Obviously, so we've talked partnerships when it comes to the rest of how much you're advertising on Amazon or Facebook or Google or all these things. What's changed with that and what's worked well since you've taken over. Yeah, resurrected the brand.
- [24:40]
A
Sure. That's our forte man is, you know, online marketing especially, you know, AdWords, things like that. That's something that helped me build Canadian Protein for sure.
- [24:50]
B
I can tell you're an OG because you're calling it AdWords.
- [24:53]
A
Yeah, exactly. I don't even know what it's called these days, but yeah, exactly right.
- [24:57]
B
Google Ads.
- [24:58]
A
Yeah, yeah, something like that.
- [24:59]
B
I can just Google just. Yeah, I don't even know.
- [25:02]
A
Yeah, I might, I might be that OG guy. But yeah, so I, I started the brand, you know, Canadian Protein with that and I, I'm a big believer in that. You know, obviously social media ads and then really, really getting involved in youth sports at the association level and then also scaling, also scaling the support for youth teams as well with respect to our sponsorships right now I think Biosteel has somewhere along the lines of 2000 teams sponsored at this point now. So like I mentioned, we're going to take those teams, we're going to throw them into our app and then Right away you have 2,000 teams multiplied by 30, right? If you have an average of 15 people, you've got 30. You know, assuming that the average kid has two parents helping manage their scenario on their, their team management situation, you know, how many people is that? Right? That's 2,000 times 30. That's, that's a good amount of people, 6,000 people. So that's a good amount of people. So we're really going to lean into that. But it's, it's very much just anything that's manageable from a KPI perspective and getting the product in as many hands as possible. So what we did too was we put together, you know, a sampling unit that is essentially nationwide. So it travels to all of the big tournaments and big, even marathons, you name it. And we have a, it's like a vending trailer that we built out specifically to be able to sample biosteel. And you know, it's just, it's nationwide. It gets pulled by an F350 and, and yes, it's, we call it the Bioseel Tour. We've got like a little radar system with a tent where you could track your puck spe and we have lineups of kids trying to beat their, you know, their buddies in terms of how hard they could shoot a puck and things like that. So it's working out very well.
- [26:49]
B
Super awesome.
- [26:50]
A
Something else that we're really leaning into as well is instead of getting very expensive with our marketing dollars from, you know, an outside perspective, sponsoring all kinds of pro athletes and this and that, what we're doing is we're transferring a lot of those marketing dollars to in store promos. So you know, end caps, putting it in the right spot. Because again, the CPG world that I didn't know is a pay to play. So we're focusing more so on putting the product in front of more eyes. And that in and of itself is great marketing because these people are shopping, right? So why not put our product in front of as many eyes as we possibly could? Because the brand recognition has already been built and we already know that the product tastes good. So as long as we can get people to commit and buy that product, we know we're gonna have a customer. So that's also the model. Not to say that we won't bring in like the high level athletes again, but I really want to be very selective because that's a market where it's like what can you do for my client? Not how we can make this relationship mutually beneficial. So it's been a little bit of a. It's been a little bit of a task trying to find the right type of partner at the elite level that feels like, hey, I'm gonna help you build this brand together, rather than, what are you going to do for me?
- [28:07]
B
So, yeah, I think of Hexclad, and they're. They ended up, I think, giving equity to what's his to. To Chef Ramsay right at the highest level. And that, to me, is like, the. The pinnacle of influence in a way, right where you can get, like, the world's most famous chef who's going to use that tool every day kind of thing. When Sidney Crosby gets traded to Toronto, you can get him maybe.
- [28:29]
A
And listen, I. I'm not. I'm actually not opposed to. I'm not opposed to giving equity to someone like that. So long as there's some sort of mechanism in an agreement that says, hey, listen, here's the expectations. You have to abide by these. I just haven't found the right partner. It's been a lot of like, oh, hey, you know, we're so and so. We're the biggest names in the sport. Yeah, we'd love to partner with you, but we'd like equity, and we'd like this amount of dollars. And I'm just like, okay, well, if I'm going to give you equity, like, what are you going to do? And it's. It's always been the answer of, like, well, I'm so and so, like, how is this not going to work? And I'm like, well, show me that it's going to work. And then maybe we could talk about ownership.
- [29:11]
B
The hottest duo in the world right now would be Biz Nasty and Brad Marchand. If you get there, you go. I don't know if you want to rat. I like.
- [29:20]
A
I listen, I like that guy.
- [29:21]
B
Oh, he's amazing.
- [29:23]
A
He's controversial. I like putting out, you know, I like getting a little dirty in the comments and stuff like that under bios. I think it's entertaining and. And it's fun. And we put out some questionable, you know, content, too, just to kind of, you know, get some. Get some attention and get people riled up a little bit and, you know, get. Get a little personality behind the brand. Right?
- [29:40]
B
100%. Okay. I want to jump because you're just doing. There's an example that you're just doing right now about that. But I want. I have to ask about Amazon, because Amazon is where I buy the product, and I find it's. It's A really interesting. I don't know how much focus you're putting there and because it's like I find it hard to find the products I want in the sizes I want sometimes. And it's interesting with the price fluctuation. Like, I like how it's interest how you're pricing more like the best flavors. Pink lemonade, in my view. And that's like one of the highest priced products. Talk to me about your overall Amazon strategy because I think there's huge room to grow there.
- [30:11]
A
Yeah, Amazon is going to end up being probably our biggest channel. Yeah, it is. We have a lot of focus on it. So we are actually in a different program than what your typical Amazon reseller would be in Amazon. Amazon actually buys product from us. We don't send it to Amazon and then get paid once it sells. Amazon actually buys it. They determine the list price, they determine where it goes. We had scenarios on Amazon this past Black Friday and Cyber Monday. They priced the product lower than what we sold it to them for. And I don't know why they did that. So it's, it's a really. So when you, when you ask like. Yeah, so when you, when you ask like, what's your strategy on Amazon? I don't know because it's. They own the product, they pick it up from us. Like all that stuff they have.
- [31:06]
B
Is this pretty rare? Is this.
- [31:07]
A
You have to be at a certain level of performance on Amazon to be invited into this program, which I had no idea prior to, you know, buying BioSteel that this program even existed. So it's called Amazon vendor central. For example, Canadian proteins in Amazon seller central. So Amazon is essentially. So if you go look at bioseal product on Amazon in Canada, it's Amazon's listing, it's not our listing. So, so it'll be, it'll show sold by Amazon, not us. So in the States we're under seller central, but in Canada, yeah, Amazon buys a product, they set the list price, they set the retail price and, and yeah, they, they ship it and everything.
- [31:51]
B
So does that preclude you from buying ads there or do you. Because you want, you'd want to be able to control both ends, I think if you were buying the ads.
- [31:58]
A
So, so we, again, we have an agreement. This is so wild how this works, but we have an agreement where I think it's a 2% of all of revenue that Amazon produces goes into a marketing strategy that they 100% handle.
- [32:12]
B
Wow.
- [32:13]
A
Yeah. We don't even handle it. Yeah.
- [32:15]
B
First, this is D2C podcast. First hearing about this secret program. That's awesome.
- [32:19]
A
Yeah, it's actually pretty wild. Yeah. Yeah.
- [32:21]
B
Well, I'll keep buying my pink lemonade there. And you were just referencing some of the wilder things that you're taking stabs with. And I saw this on your LinkedIn profile and I will do a shout out to any designers, any people with a good design eye in the audience. Dan's running a $10,000 giveaway to design the wrap for your. Do you have your cybertruck already?
- [32:43]
A
I do, yeah.
- [32:44]
B
You do. Okay. And you're putting a wrap on it?
- [32:45]
A
Yeah, for about a month or so. Yeah. Yeah, we're gonna wrap it. Yeah, we're gonna wrap it. Brand it Bio Steel. Yeah, it's just. I thought it would be a cool kind of promo truck. There's a ton of attention with this truck. I mean. Yeah, you know, you probably see. I don't know if. Is it a pretty prevalent truck out in Vancouver area?
- [33:02]
B
Not really. Maybe Vancouver. I've seen a couple on the island right now, but not a lot.
- [33:08]
A
Yeah, it's not super prevalent in Canada yet. I want to say, maybe not even up in Toronto, but I know down in the States, in California especially, it's pretty prevalent, pretty popular. There's a lot of them down there. But Canada just started getting them like this past summer, so. Yeah, I want to ride the wave, man. I mean, listen, like, it's. It's. Our target demographic, you know, tends to really like this type of vehicle and it does grab a lot of attention. It's super wild looking. It's odd looking. It's. You could love it or hate it, but yeah, you're gonna. It's gonna get attention no matter. Whichever.
- [33:40]
B
Lots of surface area to wrap on too. Right. And.
- [33:43]
A
And what. What's wild is. Is how much people hate this thing. It's actually shocking to me. It's like, like, I don't. I don't know why. It'll get posted in like car spotter, Facebook pages or whatever. I'll get tagged in it and people are just like, oh, I hate this thing. So, like. And I don't. I don't really know why people don't like it so much. It might be people, like, don't like the whole aspect. Yeah, maybe people don't like Elon Musk. You know, from my perspective, I'm not necessarily an EV guy. I just think it looks cool. I think it looks so different that it looks really wild. I really like different looking things. And you know, for me, like, I Don't really, I don't care about that type of stuff and I actually like the fact that it's controversial because it, you know, it commands a lot of attention and at the end of the day, the, you know, the currency of today's attention. So I've at it, guys. Hate it all you want.
- [34:31]
B
Super cool.
- [34:32]
A
But yeah, so yeah, we're doing, yeah, $10,000 rap contest for, yeah, the best rap and list it for a month and see what we come up with. We've already got a couple submissions that we're going to wait for a couple better ones. But yeah, but, but, you know, still a little bit early. It's only been 24 hours. But yeah, we've got a couple, we've got a couple people submitting it for sure.
- [34:50]
B
And I've been enjoying following your journey from your very first post, taking it over where you, you know, you weren't getting a lot of engagement in the beginning on LinkedIn, but I feel like now you've kind of built up a pretty good, good following. Lots of supporters on Link. Talk about that process a little bit and what that's brought to you.
- [35:03]
A
Yeah, I think, I think in the beginning I didn't really like LinkedIn too much because I didn't really understand LinkedIn and I think that that's my own issue is, you know, when you don't understand something, you tend not to really like it. But then all of a sudden I started posting about the transition and the business aspect of it and people were like, all over it. So, yeah, that, that's what I feel like, obviously is the best part of LinkedIn is people want to see, you know, the journey and they want to learn and stuff like that. And I think I'm in a unique position where it's fundamentally an interesting scenario, right, Taking over a bankrupt business that spent, spent, you know, hundreds of millions of dollars and here I am, this unknown guy that took over a pretty, pretty big brand and I still wonder how I even got this far, to be honest with you. So I think people are genuinely interested in probably what I'm doing. And this, this last year has very much the same startup vibes that I had with Canadian Protein, to be honest with you. It's very much we're just dealing in extra zeros. That's all the differences. And it's, I could honestly say that taking over and fixing a brand that went bankrupt is very similar to starting a brand that didn't even exist before. It's very similar. If anything, it might even be Tougher, because you're trying to navigate all of the ill will behind the scenes of vendors and retailers and the brand for face value might have seemed okay, but on the other side of it, behind the, the curtain, there was a lot of issues with it. And we've had to really navigate that and really try to explain to people like, listen, we're not the old guys, we're the new guys. The brand just is still bio steel, but we don't operate the same way. We pay our bills and, and this isn't, this isn't how it's going to be going forward, but we're still having, there's still some people that just, you know, won't even deal with us. And which is fine, I get it. But yeah, it's been a little bit of an uphill, uphill battle with respect to that.
- [36:59]
B
And you corrected it right off the top because it is different. It must be tough for people to conceptualize the difference between buying a brand from someone and taking over its, its assets. Right? Oh, I feel, and I feel like, like Tai Lopez, right. Like Tai Lopez bought like Pottery Barn and some of these other ones in, in a similar situation. And I feel like for him it didn't go very well. I feel like it's, it's, it's, it's a dicier proposition buying a bankrupt brand for just those reasons that you've, you've mentioned. And congratulations for so far pulling it off.
- [37:26]
A
Thanks, appreciate that. Yeah, I don't know too much about. I have heard that he got into, you know, he's having a little bit of problems with that, but I don't know too, too much about it. But yeah, I mean, you got to think when I took this over, it was, I like to use the analogy of somebody taking a thousand piece puzzle or a million piece puzzle almost in a box and then being like, okay, here it is, and then not handing it over to you, even just like throwing it up in the air. And like all the puzzle pieces are scattered all over the place and you're just like left to try to put it back together. And like some of the pieces are broken. You know, some of those little like things that you have to fit into, the other pieces don't go into each other or they're broken off. So it's, it's very much been that type of situation. You know, to be honest with you, I'm lucky that I have a team of killers behind me here that, that have just been amazing in this whole process where we took this brand over with a very small team. When I took this over, I didn't have anybody. I didn't bring on anybody from the old biosteel. I didn't hire anybody to help me take it over. It's been a very slow process. I leveraged the team that I had with Canadian Protein and my real estate business and stuff like that to be able to make the transition. And then I slowly hired on. Maybe at this point we have 10 people dedicated to BioSteel, you know, solely. Maybe not even. Maybe like eight people dedicated only to BioSteel. And then we just leverage. Say for example, my right hand man, Clark, right. He works on Canadian protein biosteel. So he's like our CEO COO of like the group. So it's, it's been, you know, we took over from a team of 190 so in. But we're doing it. And that's a test almost like Elon Musk, right? Like he took over Twitter and how many people did he fire? Like what is. Is 80% of the entire staff? Something crazy. So like a lot of.
- [39:19]
B
And the product never skipped a beat and has only grown ever since. Right?
- [39:22]
A
There you go. Yeah. I think a lot of companies don't realize how much fluff is there. Right. And how much fat you have in your, in your business. When it, when it really comes down to it, if you can find the right people to really adopt your type of culture. And I, you know, I think I run a little bit of a different culture here. I have very high expectations and we're a very tight knit group of people here and we're very. How can I explain this? We're very like gritty. We're very gritty here. Right. We'll scrape by like the skin of our teeth. But we will get it done. Like if we need to work weekends, like we will, you know, we never turn it off. We're ride or die here for everybody. And when you have a team like that, that's an insane competitive advantage over and above anyone else. I mean if that's the type of culture that you've been able to build and I think I have here that that's a very interesting competitive advantage for sure.
- [40:15]
B
And you're fully hydrated non stop all the time. All the time. This is great. And I feel like this is our yearly update. So this is going to launch in. In gen in the. One of the first episodes of the 2025. And so we'll have to con. We'll have to do a yearly update and, and just Kind of watch this thing grow because I still think, yeah, the potential is, is the sky's the limit. Nobody knows that the brand is anything else than what it was.
- [40:40]
A
You know what I mean?
- [40:41]
B
Like no one from the consumer perspective. And it's cool. Cool to think you've got all these athletes who are just smuggling it into their, their water bottles.
- [40:49]
A
Yeah, yeah, pretty much. Yeah, exactly. I actually have a meeting with the MLB next weekend at their winter meetings. They feel like it's the right brand for the mlb. So we'll see, we'll see what's going on there. But the MLB is like really big fans of the brand. Like huge.
- [41:02]
B
Oh, that's interesting.
- [41:03]
A
Yeah, yeah, yeah, we're pretty. We're actually producing a product specifically for the MLB that I'm not going to say what that is, but I'm actually bringing samples to the winter meetings for all of the registered dietitians at that meeting for them to sample. So we're actually. Yeah, even for example, the Leafs came to us and was like, hey, once you got your in house manufacturing, we want a pre workout. Can you make this product for us? So that'll allow us to be able to make bespoke products for professional teams that want a different product that might not be on the market or even say, for example, like, you know, if, say I say I was the, the strength and conditioning coach or the registered dietitian for the Leafs and you were for, you know, the, the Canucks and I, I had a product that I thought was a competitive advantage. I'm not going to want you to know. Right. And you're not going to want me to know. So we can make these products as long as they're like within reason in terms of how many units because we, you know, the testing is expensive. We can, we can do that now. Whereas that's, that's not something that was really a viable option before because of. Not a lot of people have their own manufacturing to be able to do this type of stuff.
- [42:08]
B
That's wild. And then, yeah, eventually teams just release their own sports drinks if they. I know they want the competitive edge, but like, sure, you could see that, see that down the line. That'd be interesting.
- [42:16]
A
Get the old.
- [42:17]
B
Yeah, maybe real Orca blood in there.
- [42:20]
A
You never know.
- [42:21]
B
You never know. Nice man. Well, great connecting and yeah, I look forward to our next catch up. I, I think the. On one of our last podcasts we talked about a ski retreat and I will tell you we are doing a, we've been invited to a ski retreat. With some other Canadian entrepreneurs in Whistler at the end of January. So I'll send you some notes about that if you're. If you're interested.
- [42:39]
A
That is super interesting, man. I've only been to Whistler once and it was at night, only for a few hours, but man, it looked awesome.
- [42:46]
B
I was there in the summer, so I was. The people were skiing in the summer there. But I think this year too is just going to be a big dump year. We're going to get a lots of snow this year.
- [42:54]
A
Interesting. Okay. Okay. Yeah, I'd love to check that out for sure. It's my birthday in January, so, you know, maybe. Maybe it'd be a little send off.
- [43:00]
B
Yeah, sounds good, brother. Okay, thanks. Thanks again.
- [43:02]
A
Thanks, Eric.
- [43:09]
B
Thanks so much for listening to today's episode. If you're not a subscriber to our newsletter, you can do that right now at Direct to Consumer all one word co. I'm Eric Dick and this has been the DTC podcast. We'll see you next time.