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Ep 511: IQBar's Will Nitze CPG Playbook: From Rapid Product Market Fit Iteration to Omnichannel Scale
00:44:49
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- [00:00]
Will Nitza
Everyone's tried every angle for a bar and like 90% don't work. Sometimes things don't exist because the market doesn't want them, and other times they don't exist because it's an opportunity. There was really no clean label, low sugar plant protein bar. This is a principle I've applied many, many, many times since on many, many different areas. But basically I was like, okay, who's done this before? And let me just call them and ask them how they did it. As you get bigger and bigger and bigger, you have to sort of like mass marketize your messaging. And this is especially true for brick and mor. You can be kind of esoteric and niche online because you're just gonna find a zillion people who are into that niche. You have more time and space to explain things in brick and mortar. You just don't. You have to appeal to everyone.
- [00:54]
Eric Dick
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- [02:02]
Will Nitza
Yeah, long story, but I'll try and compress it. Basically, I was. I didn't like my job. I was 26 at the time. I was in Boston. I'm now in Miami. But my first job out of college, I learned a ton but pretty quickly realized that I didn't. I was selling software to oil and gas companies. I didn't really love software and I didn't really love the oil and gas industry and I had a very hard boss, although I now in retrospect, very much appreciate that. But yeah, was unhappy and unpassionate professionally and got really into nutrition at the same time. This was like 2015, 2016. And just for personal reasons, I felt bad on a daily basis. And I realized that was all due to my high carb, low healthy fat, low protein diet. And so started consuming a paleo diet and felt way better and got really, really interested in the intersection of nutrition and cognition, mostly because I was just mentally crashing on a daily basis. But I had also studied psych and neuroscience in college and always loved the brain and why it breaks down, how to make it work better, et cetera. And then the last piece was I read a book called Mission in a Bottle by the founder of Honest Tea, founders of Honest Tea, and got really interested in food and beverage entrepreneurship. So all those things kind of combined into me thinking, okay, maybe I'll start a brain bar company.
- [03:31]
Eric Dick
What was in the book that really hit home for you?
- [03:33]
Will Nitza
Well, I really related to the guy's name, Seth Goldman. He went to Harvard undergrad and was a government major. I went to Harvard undergrad as a government major. He went into consulting right out of school and hated it. And I went into my own job and really didn't like it. So there's just all these parallels where I. It just really like resonated with me. And then it was just such an epic journey. There were so many ups and downs. And then he had that epic ending of the journey where he sold to Coca Cola. And so it just like had all the makings of a great, great story. And also I was, you know, I wasn't a software engineer. I wasn't a engineer more broadly. So the thing I was going to make was always going to be something I could make with my hands, like in my kitchen. So there were those limitations as well. And I also just like physical products more in general. So I like making things and clear transfers of value. But yeah, and I actually got to meet Seth. I read the book, I emailed him, he answered right away, and he was like, hey, I'm giving a talk in New Hampshire. So I rented a car and drove. I didn't have a car at the time. I rented a car and drove up to New Hampshire and had dinner with him and it was super cool.
- [04:44]
Eric Dick
That's awesome. So what were your first steps in your kitchen? Making a bar that people were going to love?
- [04:49]
Will Nitza
Well, I didn't. I truly did not know where to start. So. And this is a principle I've applied many, many, many times since on many, in many different areas. But basically I was like, okay, who's done this before? And let me just call them and ask them how they did it. So I found a couple people who had started a bar company in Boston and bought them coffee and asked them 100 questions and, you know, everything from what should our cost of goods be to our gross margin? Where can I make it? Do I make it in a commissary kitchen or a manufacturer? What should I use? Woocommerce or Shopify or BigCommerce? Everything incorporating, should I be a C corp or an llc? So I just. And then, by the way, I did that with like three other entrepreneurs. So I kind of triangulated a roadmap. But yeah, I mean, still, different people approach it different ways. Product development and initial manufacturing of products like that. I took the path of trying to own it and gain the expertise myself. And so I would literally have samples of ingredients sent to my apartment and make prototypes in my apartment. Other people would go to a third party and have them develop it. So there's no one right answer. I think my way is better because you force yourself into understanding all of the ins and outs and nuances of your product and you can evaluate third parties better when you do delegate to them at a later date. And also we were trying to do something that frankly was very, very challenging. We were trying to make an ultra low sugar, high protein, good tasting, clean label bar which is. It's just very, very tough. And not many people have great experience. Third parties have great experience doing it. So we're trying to do something new. But yeah, I mean, it was thousands of iterations in my kitchen.
- [06:43]
Eric Dick
You kind of founded this around 2017. Is that about the timeline we're talking about?
- [06:47]
Will Nitza
Yeah, I mean, I was iterating on it in 2017. Then we launched a Kickstarter December 17th through January 18th. That was when we sold our first units.
- [06:56]
Eric Dick
Super cool. What was wrong with the protein bars or the protein industry at that time? In your eyes?
- [07:01]
Will Nitza
Nothing was brain focused. So everything was like weight loss or building muscle or digestion. It was all body, body, body, and there was nothing that was brain focused. It didn't exist. And sometimes things don't exist because the market doesn't want them, and other times they don't exist because it's an opportunity. So beyond that, there was really no clean label, low sugar plant protein bar. Everything was still pretty high sugar at that time. And then the things that were low sugar were super dirty label. It was like a quest bar that uses sucralose, which is an artificial sweetener, for example. So I wanted that personally and I also thought many other people would want that. Plant protein was booming at the time. It's since kind of come down a bit, but still there's so many people who want plant protein and there were very few plant protein bars at the time. Still are.
- [07:54]
Eric Dick
I was just talking with someone who was just at Expo West. I assume. Were you at Expo west as well?
- [07:58]
Will Nitza
No. Kind of contrarian move. We don't actually go to the big events, but yeah, everyone else does.
- [08:04]
Eric Dick
They were just saying how protein is in everything. You know, protein is protein drinks, protein chips. Like everything is protein these days. They were saying that they didn't. The person I was talking to was saying they didn't see a lot of innovation this year. There weren't a lot of like, you know, aha moments or really big interesting things at the show. It was a lot of like retreads.
- [08:23]
Will Nitza
Yeah, that's what I heard as well. I mean, protein is a mega, mega, mega trend. It's funny because it's kind of been a trend forever. Like, it's all like, protein is cavemen, literally. Yeah. And I think the Peter Attia, if you're familiar with him, like, is a big proponent of. I think it's 1 gram of protein per pound of body weight per day. And there's, there's all these talking heads that have come out in the last couple years saying we need more protein and specifically women need to consume more protein than they have been. So I think the female side is contributing massively to the protein boom. Guys had already consumed a lot of protein. But yeah, it's ramped up, which is great. I mean, we definitely benefit from that tailwind. But then it is getting a little bit bubble. Like, should there be protein in your pasta sauce? No, probably not. I don't think the market wants that. But there are these form factors. People expect to get protein from shakes, bars, et cetera, where we're all going to see a nice tailwind from it.
- [09:26]
Eric Dick
Super cool. I was just, I actually just did a podcast with Back to Nature. They're like a cookie and cracker brand on the aisles and they, they're just talking about their rebrand to move away from plant based as like a main feature. Because I guess it's maybe different in a protein bar where you might think, think that, you know, it's good that it's plant based. Whereas with crackers and cookies, you're not even thinking about animal proteins or animal, you know, anything really. So they kind of, they've taken that off the front of their box. Has plant been a big selling feature for you, it being plant based?
- [09:55]
Will Nitza
Yeah, 100%. I mean look at most protein bars, they're animal based. So if you do want plant protein. Yeah, I mean there's us and caught like two other players. But yeah, I mean there just are a lot of people who want plant protein. Some who are vegan, most actually who aren't, and they just want plant protein. Maybe whey protein upsets their stomach, whatever. It could be a variety of reasons, but it's been dominated by whey. And then even the plant based options that existed were just frankly not very good because plant protein is harder to work with. It's grittier, it often has a taste to it, whereas whey is like fairly tasteless. So it's just more challenging to work with. So even the products that existed were just not great.
- [10:40]
Eric Dick
So you got, you went through thousands of iterations. It's funny when you're talking about, you know, there's two ways to approach it. One in your kitchen, one you outsource it. And it's funny that like we, I come from the ad world and I talk to so many brand founders who have the same sort of opinion about growth, where it's like so important to sort of like understand the growth levers in your business yourself before you're, you know, for instance, go to an agency. But before we dive into that, what, what were your next steps after kind of getting the product to the point where you wanted to. What was your sort of go to market strategy in the beginning?
- [11:10]
Will Nitza
So a big piece was just starting with E Comm. Right? Traditionally food and Bev, you think of it as a brick and mortar item because I think it's like 93% of food and Bev items are bought in store. So that is where the market is. But we found it to be so critical to start online because we just got so much feedback. And this is especially true for new products trying to do new things. So like a brain bar, that was a new thing. So do people even want it? You know, and then if they do want it, what do they want from it? And we just got so much feedback, make it, you know, actually we didn't have protein in the product at first. And then people said could it would be nice if there was protein. And then you hear that 500 times, you're like, okay, can we incorporate protein and have these like brain nutrients? If yes, let's do it. And the answer is yes. So we did it. Hey, there's too much fiber. It upsets my stomach. The type of fiber, you know, like you just get so much feedback. And we iterated the product actually many times as well as the packaging and we actually even as recently as Jan of last year had a massive packaging refresh. So you're never quite done with the product or the packaging. But yeah, I mean, it's the whole thing of just like launch something, get it out into the market, get feedback and then micro pivot 100 times until you achieve product market fit.
- [12:33]
Eric Dick
And were you doing this on Meta?
- [12:35]
Will Nitza
Yes, we had a Shopify site and mostly we were driving traffic via Meta and then, you know, standard blocking and tackling of email marketing and things like that. Organic social as well. But then we also layered on Amazon Storefront and Amazon actually started outpacing DTC like 4 to 1, just because it's sort of category specific. Like bars are just sort of a staple grocery item and people buy staple grocery items on Amazon to a far greater extent than they go to each individual website and like place like 50 different orders. They'd rather just create a, a giant basket on Amazon. So that started outpacing. And then also we got this tailwind from keto. This was in 2018, 2019, 2020, where there's just a giant boom, particularly on Amazon, of people searching for keto snacks. So the Amazon advertising mechanism was just search advertising, bidding on keywords. And then we later layered on DSP display advertising on Amazon as well.
- [13:48]
Eric Dick
Nice. I've talked to lots of different CPD founders and the degree to which they're focused on profit in the beginning is always interesting for me. So I think I found a quote from yours that says until it's profitable, it's a project, not a company. How did you think about profitability since the beginning? And did ChatGPT lie to me about that quote?
- [14:07]
Will Nitza
ChatGPT nailed it on that one.
- [14:09]
Eric Dick
Nice.
- [14:11]
Will Nitza
Well, so I mean, of course you want to be profitable from day one, right? But that's just not a reality of consumer goods or really manufacturing anything. So I mean, the game we're playing is volume. Like that is if I were to give you one word of the game we're playing, it's a volume game. That is what it is. So your P and L just does not work until you've achieved volume in most consumer good categories. And the volume threshold that typically right Sizes, your P and L is somewhere in the 30 million in annual net sales range. Really the question is just how do I get to 30 million in sales? Because that's when you set yourself free. That's when you get enough volume where your gross margin expands enough to where you can be cash flow positive, not like out of the woods. Because even past that, even when you're EBITDA positive, you're still reinvesting everything back into bigger and bigger inventory runs. But at least you don't have to ideally raise more money. You're not hemorrhaging cash. That's the whole game. How do we get to that as quickly as possible? Because along the way we're going to be hemorrhaging money. So if we're hemorrhaging money for two years or three years, that's a lot better than six or seven years when we were super capitally efficient. But it, we raised just under 10 million across the first six years. And then we flipped profitable last year and then we're majorly profitable this year. But yeah, it took, you know, the first five years, we lost over a million dollars every year. But that's, that's like super like low for a brand like ours. Usually brands are losing 10, 20, maybe even 30 million bucks. So I would say we were a good 5x more efficient than a peer company of ours. So. But it's not. Yeah, that just is the game you're playing. No one really, I guess, short of like supplement companies or if you're, you know, it's perfume or something like insanely high gross margin out the gate. No one's profitable in year one or two.
- [16:18]
Eric Dick
Where did your biggest efficiencies come from during those years? Was it really, was it your sort of your focus on iterative performance marketing that allowed you to like not have huge retail runs that you were losing money on or where did your biggest efficiencies come from during those years?
- [16:33]
Will Nitza
Cogs, really. So it's just like wildly different to produce a bar that costs you $1.20 versus a bar that costs you 50 cents. Like that's just an insane difference. So. And the only way to get it, you know, your costs really, really streamlined is volume because then you can go back to all of your suppliers and your manufacturer and just keep whittling down, whittling down, whittling down. I mean you can reformulate or pit suppliers against each other. There's other stuff, but really it was cogs. And then I would say we onboarded more net profitable accounts as well. So we then did get to brick and mortar and really in year two and in a major way in like years four and five, Walmart, Costco, Sprouts, H E B, Publix, et cetera. And they are more net profitable than E commerce because you're just shipping pallets and pallets and pallets and in many cases truckloads. Right. So your logistics costs per bar. We look at everything on a per bar basis. So your logistics cost per bar just like infinitesimal with, you know, relative to E commerce. And you're also paying $0 to acquire customers. So it's just a better proposition from a P and L standpoint. But you need that E commerce piece to drive that flywheel. People need to find you there, then see you in Costco or Sam's Club or whatever. And vice versa by the way. So people will see you in Club, you know, or in a Publix or Sprouts and then they'll search you on Amazon and buy you on Amazon. So once the flywheel of online to offline kicks in, it's pretty epic because you just acquire customers for less in both areas.
- [18:30]
Eric Dick
And in the meantime, this category has really blown up. Like I go to the bar aisle in my grocery store every week and grab a handful. I think I'm eating kind bars these days. But how much has the category evolved kind of since you started in 2017, 2018?
- [18:45]
Will Nitza
It's a good question. I believe the CAGR is like 7 or 8%. It grows every year. I would say it's a super saturated category. But there's always people coming in and out. Right. The failure rate is insanely high. And so it's a category where people try so many different types of functionality. Caffeinated bars, nausea related bars for pregnant women, you know, like, yeah, like everyone's tried every angle for a bar and like 90% don't work. So there's always sort of a reversion to the mean. But in general there's like breakfast bars, snack bars, protein bars and they're all massive. I would say like net net. Whereas the category shifted, it shifted towards lower sugar, higher protein and I would say cleaner label. Net net. Although there are some notable counter examples to cleaner label. Like there will always be a massive market for just like a dirty label, affordable, good tasting, high protein bar. I mean Quest bar, right? Still, still massive, still a dirty label. But I would say on balance, like across the whole category, things are getting cleaner, cleaner label.
- [20:03]
Eric Dick
So the things you label there about the way things are going Are the things you kind of started with so good on you for, you know, being a front runner in the trend?
- [20:11]
Will Nitza
Yeah, I mean we started with it, but also micro pivoted into it. Like what we. The product, like I said, the product's never done. So we just looked at the market and looked at the market data and looked at customer feedback. And it's not like we from day one knew that that was what should be the case. We used data to arrive at that place.
- [20:30]
Eric Dick
Are you going to be creating a creatine protein bar? Is there such a thing? Because speaking of trends, that seems like the one when it comes to. Because that's what they're talking about with the, you know, it helps your neural pathways and it's, it's, it's the it product.
- [20:42]
Will Nitza
Right now I feel like totally no, because we don't really want to be a supplement company. So when you do that, you're kind of a supplement company. And also, do people want creatine from their bar? No, not really. You know, it's really not that much of a pain point to add creatine powder to your smoothie or drink or whatever. So. And that would put off a lot of people too. They're like, well, I don't want creatine in my bar. So you want to like the game you're playing is give everyone like the table stakes, things that no one would have find offensive. Right. No one's going to be pissed that there's protein in the product, no one's going to be pissed their fiber in the product, etc. But now if you put like caffeine or creatine. Well now actually a big swath of consumers are gonna be like, whoa, I don't want that. So generally you wanna. Yeah, like in this category, you don't wanna create objections that large percentages of consumers will have when it comes to your packaging.
- [21:46]
Eric Dick
You mentioned you just did a redesign recently. What has been your thought process with like why you've made design choices or why you've had to redo certain design choices? What are you trying to achieve?
- [21:56]
Will Nitza
I mean, it's really two, I would say three things. Trademark and like brand identity and brand look, call outs and call out hierarchy and flavor appeal. So you're just always refining all three of those things. Or I guess you're not always refining your trademark or brand identity. But we did actually meaningfully evolve that in Jan of last year, for example, like random thing, our logo didn't have a box around it. And then we're like hey, we need to segment this logo off from other elements. And we actually slightly tweaked our logo. Flavor appeal. We had illustrated flavor cues. You know, if something was almond butter and chocolate chips, it would be like an illustrated almond butter chocolate chips. We shifted to photorealistic versions, you know, and there's no like perfect answer. Right. Olipop and Poppy have illustrated cherries or lemons or what have you, and other drinks have real cherries or lemons on top. So there's no perfect answer. But we just found that people respond better to photorealistic flavor cues. And then the call out hierarchy thing, we used to have keto in huge letters on our Caddy because keto was huge and we were keto compliant. Then keto died. And we looked at it and we're like, hey, we should probably remove this because similar to the creatine thing or caffeine thing, it's actually like, it's great for the people who are keto, but the people who are keto, we're gonna figure out where you're keto and buy anyway. And it's off putting for people who aren't keto. They're like, what is this, a diet bar? So we shifted that call out set and call out hierarchy. By the way, retailers, this is one benefit of working with retailers is you'll hear back from them. They're like, hey, we don't want the word keto on packaging because we've looked at the data and people, customers are moving away from that. Great. You know, that's just another data point. But like more broadly, as you get bigger and bigger and bigger, you have to sort of like mass marketize your, your messaging. And this is especially true for brick and mortar. You can be kind of esoteric and niche online because you're just going to find a zillion people in pockets of America who are into that niche. And then also you have more time and space to explain things in brick and mortar. You just don't. And you have to appeal to everyone. And so it's a real delicate balance and threading of a needle of how do I position our product to where I still get the sale from you? If you just want a chocolate bar or you just want a plant protein bar, or maybe you're into the brain thing. Cool. But I can't be off putting to the first guy who just wants a chocolate bar. So it's, how do I appeal to all these people and allow people to like double click on certain things? So maybe when they turn it to the side now that allows the people who care about the brain nutrients to double click on that. But it's not on the front, so it's not off putting to the person who doesn't care about that. It's, it's, it's very delicate.
- [25:00]
Eric Dick
How has your shelf space, like. Because obviously there's a battle for the shelf. You know, the shelves that are at eye height essentially, and the most easily reachable. How has your sort of strategy does that? Is that all just determined by the retailer, essentially, and you're kind of along for the ride or how has your shelf space evolved over the years?
- [25:19]
Will Nitza
Yeah, I mean, that's all dictated by the retailer. So they have what's called the pog, a planogram. So there's a planogram for every category. So there's a bar planogram which is just like. And often they'll literally have like a kitted version of it in the HQ and that then gets plussed out to the thousand locations and they'll build it. You know, it's like a, it's like a Lego set and they're like, let's ship this here. Okay. Do we want to pair things, you know, have a section that's all low sugar bars? Well, no, actually, because some of them are high protein and so that one's actually more of a high protein bar than a low sugar bar, even though it fits both. It's a Lego set for that category manager. And they're creating what will move the most units possible, or what they think will move the most units possible. And they're always adjusting, always, because the market's always adjusting and they're always getting more data. And so there's like funny things that happen where, let's say Kind bar was the brand that moved the most units out of any other brand in the set. You might think, cool, they'll put them at eye level because that's where the most units move. Well, no, actually they'll put them on the bottom row or the top row because the people going in to buy those, they're gonna buy it no matter what. Right. And so, and then other brands that are maybe up and coming brands have less notoriety. They're actually at eye level, which is the best positioning, because you're not gonna lose any of those kind buyers. But now you're gonna get people to try these new brands. Right. So it's actually sort of. There are certain things that are counterintuitive about it, but yeah, I mean, that's all. That's why Category managers. I mean they're super important positions. I mean they are the way things are. Merchandise has a really real impact on sales.
- [27:03]
Eric Dick
How do you think about top of fund? Like I think, I guess retail is probably your biggest distribution channel at this point.
- [27:09]
Will Nitza
It's roughly 50, 50 actually between D2C and retail.
- [27:12]
Eric Dick
That's super cool. But alliance. Do you consider Amazon DTC?
- [27:16]
Will Nitza
No, but it's 50 50e commerce relative to brick and mortar.
- [27:21]
Eric Dick
Yeah. That's amazing. And then how do you. And you mentioned a few things you do on Amazon with ads and the display network. Are there any other things that like how else do you think of awareness and consideration building in your category to bring more people into store?
- [27:34]
Will Nitza
I mean we do, we do top of the funnel stuff like the display ads and Amazon Fire tv. And we invested heavily in podcasts this year.
- [27:43]
Eric Dick
Oh cool.
- [27:44]
Will Nitza
As a top of the funnel exercise, we haven't done tv. We haven't. We've done a little bit of radio. But no, I mean like the big top of the funnel and oh, you know, P.R. we're ramping up. But the big top of the funnel thing, the biggest would be podcasts and Amazon display and other Amazon top of the funnel stuff like Fire tv, streaming tv. But we didn't, I mean we did all like direct, like we didn't do anything top of the funnel stuff really until like a year ago. It was all direct response.
- [28:19]
Eric Dick
Talk to me about your podcast strategy. How is. I guess it's maybe early to get returns. I've heard podcasts can have a bit of a longer tail. But how. Talk about your podcast strategy and how.
- [28:28]
Will Nitza
It'S played out, man. My, my wife who runs our, who's the CMO and runs our E comm business would give a much better answer to that. But yeah, I mean like the high level is. So we have an agency that's really, really good and gets preferred rates. And, and by the way, this is part of a broader model. We have a super core hub team, eight people. And then we have like 15 third parties around us. We have a D2C third party, we have an Amazon third party, we have a co manufacturer, et cetera, et cetera. So one of those is a podcast agency and they're very good. And so they are constantly sort of refining the universe of shows that they think will, you know, do the best on and get the best return on ad spend on. And it's like again, not intuitive. Which is kind of funny. Like true crime we absolutely crush on. Which is hilarious.
- [29:23]
Eric Dick
Makes sense.
- [29:24]
Will Nitza
I Think it's just because it's all women and we skew a little bit female. But I didn't have that one on my bingo card. So. Yeah, I mean honestly, it's like leaning on them heavily and then agreeing on what sort of roas's we want to see. I mean we have, we have on every ad read, we have a discount code that goes direct to our site and. But yeah, I mean our expectations on returns are much lower than our direct response channels.
- [29:52]
Eric Dick
And then Meta, like Meta has been an absolute roller coaster for all the years that you've been running this. How. I guess you guys use an external agency for that as well. But how's Meta working for you? I guess in 2025 pretty good.
- [30:05]
Will Nitza
I mean I think our CAC is like 25 bucks, which is for us, good. I think our average order value is north of 50. So yeah, it's scalable and good. I think we have a ton of room to run. I mean DTC is only 10% of our business. We're a super diversified business. But yeah, I mean it's still a big, I mean it's a, it's a eight figure net revenue channel for us. But I think. Good.
- [30:37]
Eric Dick
Nice. You're pretty active on DTC Twitter. There's a lot of DTC Twitter bros out there. What do you get out of being a presence on DTC Twitter?
- [30:45]
Will Nitza
Oh man, I'm like, I don't. Am I a big presence? I don't. Well, you just, you're good.
- [30:50]
Eric Dick
You're a quality poster. I wouldn't. You're not a poster. You're not doing it for sh. Ts and giggles. You're putting out quality good information on a fairly regular cadence. I would would say chatgpt agrees.
- [31:01]
Will Nitza
I would say like for one, I'm not a DTC person, so I'm a business person. And good businesses are not D2C. They're omnichannel, like in consumer goods. So totally no one like the goal of a consumer good brand is not to be D2C. It's, it's to be omnichannel, especially if you want to be acquired. Really. No one is. With some, some example, some exceptions. No one's trying to acquire brands that are D2C brands in 2025. And that's not going to change. They want to acquire brands that are. Have. Can be proven to sell in multiple channels. And it's not even just like, oh, it works DTC and Amazon and one retailer. It's like, no, it works in Target and Walmart and Costco and DTC and Amazon Anthrive market, right? Like, it's. The bar has gotten way, way, way higher. And you have to be really solid from an omnichannel standpoint. And I think that's what a lot of people on TTC Twitter miss is like, hey, just so you know, like, this is just one sales channel. And quite frankly, if you're selling at least in Food and Bev, it's just like the starting point channel. So I think that's maybe a differentiator of myself and the company is we look at things way more holistically and we look at how DTC feeds brick and mortar and vice versa. And so we're like, I'm not like, nerding out on cost caps. You know, I actually don't.
- [32:34]
Eric Dick
Shots fired.
- [32:35]
Will Nitza
It's just a terrible use of my time, right? So it's not to say it's a bad use of other people's time. It's just like in an omnichannel that's like one piece and then there's like 20 other pieces that like all aggregate up to the business. And so I think people, like, go too narrow in their scope of a session and they lose the forest for the trees a little bit. I'm also just more interested in like, broad insights, like, get someone like really nerding out on one very specific thing. I mean, that's cool for that niche, but again, like, is that gonna move the needle of my total business? No. So I don't know. I mean, the other thing too is like, everything, like social media people are just cosplaying, right? None of this shit actually matters. All that matters is your objective results under the hood of your business. And the reality is that's extremely contextual. And so someone saying, hey, this worked for me, well, that's great. That's not necessarily going to work for me. And even if it did, it's still better that I test it myself, confirm that it works for me. And this is true across form factors, like what works for bars is not going to work for almond milk, and what works for almond milk is not going to work for metal wallets. And what works for metal wallets is not going to work for party supplies. Right? So these markets and the consumer bases behind them just operate so differently. And so it's. Everything's. If you don't operate under context, it's. It's useless. So I don't know, I think like, for honest, we're just like cosplaying out there. And having fun and it's entertainment. It's not really like the actual implementable business knowledge is, I would say, slim to none.
- [34:30]
Eric Dick
I just was seeing someone getting hammered yesterday for posting their clients like 27.23 ROAS. And it's like Roas specifically, like that could be on one campaign that could be like, you know, like one little tiny aspect of your business. And so everything's framing on, on dtc, Twitter. But I would, I would call you out as someone who puts out valuable information, not a shit poster. So congrats on that.
- [34:53]
Will Nitza
Appreciate it.
- [34:54]
Eric Dick
Yeah, anytime. I've seen you talk a lot about Mars as a, as a, as a big company in space. I love Warren Buffett's like commentary on like trying times where he says, you know, what was the number one chocolate bar 100 years ago? It was a Mars bar. Like, what's the number one chocolate bar now? It's Mars. Like, so even though things are changing tumultuous, like there's still North Stars in the business. That's all a preface to say, where do you want to take this business? You've hit. It sounds like you've hit the, you know, the, the economy of scale that you need to in order to start generating a profit. You're mentioning in the past couple years, you've generated a lot more profit than the previous years. Where, where do you. What's next for IQ Bar? Are you angling for a Mars acquisition down the line?
- [35:35]
Will Nitza
Sure, if Mars is listening. If you're listening, they know where to find me. Yeah, I mean we are building the business to be exitable for sure. And what that means in 2025, which by the way is different than what it meant in 2021, let's say, or 2018 is you have to get to 100 plus million in net revenue. Have to be somewhere between 15% and 25% EBITDA positive. I mean, I guess more if, if that's possible. I've just never seen it in our category. So at least 15% EBITDA. And so I. Ideally you're like making like 125 million net rev and over 20 million in EBITDA. And to acquirers that is an attractive asset because it's de risked to a large degree. Clearly product market fed has been achieved and it's profitable and oftentimes it will be incremental to their profit margin. But either way it's default alive. And so that is the goal if you want to be acquired. Very strategic. Maybe you don't, maybe you want to just cash flow the thing. But assets like these are never really cash flowable, especially if you want to keep growing. I mean, there's never a point where you're like, oh, cool, let me just pull 3 million out of this business. Like, no, you need that 3 million to go make more inventory. And we have a line of credit now. We luckily have not had to draw on it, but we've come very close again, we're like meaningfully profitable. It's just you're always cash poor. You're always cash poor. So I mean, the game we're playing, and I think most are, is how do you get to exit? And so you're just sort of a price taker on that because, you know, strategics and banks are quite clear on what it takes to get acquired. And it's just like, okay, let's go do that. And this harkens back to what I was saying earlier about you gotta be omnichannel. You gotta crush it in every one of those channels that you're in. It is not enough to be great in dtc. You have to be great in Amazon too. And you have to be great in grocery, and you have to be great in the club channel, and you have to be great in the natural channel. Like that is the bar, which, it's a very, very, very high bar. So, I mean, if you want to get rich, like, this is probably the hardest single way to get rich in the entire economy, but it's fun.
- [38:02]
Eric Dick
What would you do? I'm just curious. As someone like you, a businessman so focused on this biz, if you were to get. John, Johnny Mars is listening to this podcast. I can tell he's going to come make you an offer. What would you. What would you like? Would you start another business pretty quick, do you think? Or would you just. Would you travel? Would you just read a lot of books? What would you do?
- [38:17]
Will Nitza
Huh? No. I mean, yes, I would read a lot of books, but that's not all I would do. Definitely start something new. I mean, you need. Humans need purpose. Most people find. Well, not most, but I find purpose from work as well as family and whatnot. But, like, you gotta be busy during the day. You gotta be spending eight hours a day doing something, push some boulder forward. And I think the difference would be I wouldn't be as desperate, like, I was super desperate to get ikeeper off the ground and make it work. And that was really powerful. I think desperation's really important the first time around, and you need that to grind everything out Also, I had no capital, so I had to fundraise. And so I'd look at things where it's like, okay, I'm not desperate. I could really take my time. I could think deeply about things. I could take bigger swings, potentially swings that involve more capital, swings that involve. That necessitate me having the experience that I now have but didn't have at the beginning of iqr. You know, it's just you have a different like aperture of what's possible and frankly more time to ruminate on stuff. So no, I'd definitely do something new.
- [39:32]
Eric Dick
A consumable. Would you stick in the. I was just talking with a Isaac who started a sword company.
- [39:37]
Will Nitza
Yeah.
- [39:38]
Eric Dick
And then he started his candy company and he was talking, he was lamenting back in the day about a sword company. He's like, you're only buying so many swords. No matter what a weeb you are, you're only buying so many swords. But he was, you know, happy to get into something consumable and he appears to be crushing it. He appears to be loving it. Would you stay in the consumable category, do you think?
- [39:56]
Will Nitza
Maybe so. I would want. I like habitual, recurring things. And so the beauty of consumables is by definition they are recurring. But even within consumables. Right. Like crackers. I'm not like desperate to have crackers every day, whereas coffee, like I actually am desperate to drink coffee every day. So coffee's a better business than crackers. Just is what it is.
- [40:18]
Eric Dick
So it's a drug also, which helps.
- [40:19]
Will Nitza
Yeah, yeah, and that too. So I want it to be habitual and recurring. It doesn't necessarily have to be that via it being a consumable, but. So maybe, but maybe not. But either way, yes, I like the recurring nature. I don't want to be selling one off stuff. So no, I'm really interested in actually data, selling data and creating unique data sets. There's all these things I've learned because I buy them and they're really expensive and I just know for a fact they're extremely high margin for the person on the other end of the trade. And I'm like, damn, you have a good business model. Data does not have a shelf life data. I mean, it kind of does, but data doesn't expire and grow mold in the hot summer. Data doesn't need to be stored in a warehouse. Data doesn't need, you can't fall off a truck, et cetera, et cetera. So I'm really interested in data businesses as it relates to consumer goods. Is it less relatable and frankly like less sexy and less fun? Probably. But I'm willing to make some trade offs for to get out of the way of just heart wrenching things that happen in consumables. Like it's just not. It's a young man's game. I mean it's not for the faint of heart. Like shit just goes wrong with consumables.
- [41:42]
Eric Dick
Stuff like that. Like you're just constantly having to source so much protein.
- [41:45]
Will Nitza
Oh man. I mean supply chain is. I mean the tariff dynamic right now is insane.
- [41:51]
Eric Dick
That was gonna be my last question for you. We're new in this trade where I'm in Canada, you're in the U.S. what's is. Are you getting dinged yet?
- [41:58]
Will Nitza
Oh yeah, everyone is. I mean it's the dumbest thing ever. So no one wants it. Who's in consumer goods? The bottom line is we import a lot of stuff and for a good reason. There are other people who are better at processing it or manufacturing it or growing it. And so to tariff that stuff at least for. And by the way, we don't want grocery inflation to go up. So it's like it's dumb from every angle. But I mean just think about. This isn't the first time, by the way Covid, you couldn't get certain food inputs. You couldn't get packaging. You had wrappers that you shipped from Korea or whatever that are stuck on a train car in Nashville and you can't get it because there's a strike and some guy got Covid at the rail yard. Like from 2018 to today has been so gnarly from just like Black swan supply chain disruption events. It's. I can't even tell you. But the latest one tariffs is very bad. I mean it just is what it is. I don't. There's. You can get creative but I think we're all just hoping they go away.
- [43:03]
Eric Dick
Yeah, I think but it's like this, there's this idea that they're going to end up replacing taxes in some degree. But it's like now it's just additive. It's like everyone's paying their taxes and now there's these tariffs on everything as well. It's like it's just bad news all around. I'll. I'll see if I can talk to our new prime minister. And for me it's just in like Canada, it's just so crazy to be re engaging with the behemoth in a way. Right. Like to go shot for shot with the US Is not going to work out well for Canada in the long term. It feels like.
- [43:34]
Will Nitza
No, it isn't. I wish Trump wasn't taking the first shot, but yeah, actually, it's like, I don't care how it resolves. I just hope it gets resolved. Like, it's just so silly, man. The bottom line is no one wants groceries to go up. I mean, that is, that was like why Trump got elected in the first place. It's like, why, why would you do, why would you go against the thing that every American says they want, which is lower prices at the grocery store? Why would you do that? You know? I don't know.
- [44:04]
Eric Dick
Well, we'll leave it there. Go to eat iqbar.com if you want to have a vegan, paleo, friendly, low sugar, clean label, delicious bar and follow Will Nitza on X because you're a good follow.
- [44:19]
Will Nitza
Appreciate that.
- [44:20]
Eric Dick
Yeah, man. Nice to meet you and good luck on your journey. I hope Johnny Mars is listening.
- [44:24]
Will Nitza
I do too. Take care.
- [44:33]
Eric Dick
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 directtoconsumerall. One word co. I'm Eric Dick and this has been the DTC podcast. We'll see you next time.