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- [00:00]
Shree Rajagop
Retail media is rapidly becoming the go to channel for brands, aiming to engage consumers with measurable performance along the path to purchase. Retailers are increasingly empowering brands to accurately target meaningful audiences based on their longitudinal purchasing behaviors and execute media impressions across on site, off site and in store channels throughout the entire marketing funnel. For brand marketers, effectively incorporating retail media into their marketing budgets is essential for growth in today's omnichannel landscape. To address this critical need, Cornell University has partnered with the CPG Guys, along with leading industry executives and visionaries from around the world to launch the first ever retail Media Strategy Executive Education program. This immersive four day program at Cornell Tech May 5th to the 8th, 2025 brings together industry thought leaders and renowned faculty to share best practices for building compelling retail media platforms. You'll discover how to collaborate on creating best in class tech stacks, measure performance to ensure brands Access the necessary KPIs based on Campaign objectives and establish strong partnerships between brands and retailers. In addition, the program covers optimizing brand strategies using AI driven campaign design at scale to achieve marketing goals. By the end of the Retail Media Strategy program, you'll have gained a deep understanding of the retail media ecosystem and how both brands and retailers can accelerate organizational transformation to thrive in the future of performance marketing. See the link in the digital liner note to this episode to learn more about the Retail Media Strategy Executive Education Program at Cornell Tech May 5th through the 8th, 2025.
- [01:40]
Steve Gardner
Hi, this is Steve Gardner. I'm the CEO of Nature's Bakery and I'm today's guest on the CPG Guys.
- [01:49]
Shree Rajagop
Welcome to the CPG Guys Podcast. Your host, Shree Rajagop and Peter Vs. Bond explore how brands and retailers engage consumers in an increasingly digitally driven world. And now, here are the CPG Guys.
- [02:08]
Peter Vs. Bond
Hello and welcome to this episode of the CPG Guys Podcast. I'm of course sri Co Founder, Co Host of the CPG Guys, co founder and Partner of Think Blue, your key to unlocking your profitability potential. As builders, connectors and amplifiers, we shape the future of commerce to drive your growth. Please do listen to my older daughter Rhea Raj's music www.riaraj.com that's R H E A R A J and her new songs Pray on It and Hot Couture just released today on Valentine's Day. My younger daughter Laraj, of course is a member of the Geffen Records Universal Music Group Cat's Eye. Their hit song Touch has now been nominated for two I Heart Music Awards. Of course we just came back from Japan in the Apple Music Awards and Touch has now crossed 250 million in streaming. Not joining me today is my fellow co founder, Peter Vsban, because he's actually out to buy a birthday cake for his daughter. Peter, I can't believe you actually forgot to buy a birthday cake. And when he's not co hosting this podcast, he serves as the head of industry and client engagement at Flywheel, the E commerce acceleration division of Omnicom. Before we get to our guests, we want to ask you to consider following us in your preferred podcast listening app. If you already don't do so, this will ensure you automatically receive new episodes as they're released. One other thing I will specifically ask you for is please, please, please, when you get a moment on Apple Podcasts, do give us a rating and a review. The rating helps inform us whether we're having the right conversation. The review tells us whether we're having the right guests. So I would sincerely appreciate that. Now let's get on to this main event. On this episode, a guest is someone focused on healthier choices for food. He's been at PepsiCo, Henkel, and now leading a baked goods company. Currently CEO of one of the fastest growing better for you brands, leading the team that is more than doubling capacity, accelerating A and M, and expanding product availability. Before I welcome him. To be fair warnings to my guests, I come from General Mills. Nature's Bakery was one I was watching out very carefully, but I'll admit it's one of my favorite. Go to, I'm gonna say snack bar. Steve is gonna correct me and put me in my place and tell me exactly what category definition he thinks is the accurate one. So we're gonna have a awesome dialogue because I know of this company very well given I come from the Nature Valley world. Join us in welcoming Steve Gardner to the CPG guys. Steve, welcome to the CPG guys. How you doing, man?
- [04:33]
Steve Gardner
I'm doing very well. Thank you for the nice introduction. And I have no issue with snack bars as the characterization of our business.
- [04:39]
Peter Vs. Bond
Awesome. But before we get started with our Q and A segment here, could you take a quick hot minute and give us a quick overview of Nature's Bakery and your role there?
- [04:48]
Steve Gardner
Yeah, sure, absolutely. Just at a very high level. So Nature's Bakery, as you said, we were founded in 2011 by a family that actually had long roots into the baking industry. And from the very beginning, they were focused on wholesome and delicious snacks that were affordable. So their initial product was the Fig Bar. And. And so they launched the Fig Bar. And over the years. Even though we've evolved from that, we've remained committed very much to that better for you snacks that taste great, convenient on the go, made with real recognizable ingredients. We target millennial families who are heavy bar category buyers, but our reach goes far beyond that. We were acquired by Mars in late 2020, so we're part of the Mars snacking division now and we have a vertically integrated company with currently two bakeries and a third on the way. And I am really proud and priv privilege to be the CEO.
- [05:39]
Peter Vs. Bond
First of all, congratulations on order for scaling it, for creating an awesome product and genuinely a better for you product. While we never discuss politics on this show, you must be smiling from the other side of your face with changes to the Health and Human Services Secretary because better for you should be a good outcome. We should all anticipate. I'll keep my fingers crossed just in in for the sake of humanity over there. But let's get to know you before we do that. A reminder though that in the digital liner notes of this podcast, we'll include links to Steve's LinkedIn profile, of course, the company Nature's Bakery's corporate websites, and so that our listeners can access it on the go through mobile platforms while they listen. So let's get to know you, Steve. First of all, I love, love, love folks who come to our show and proudly represent their brand. Steve. For those of you that'll see this on a video clip, you'll clearly see Steve has his Nature's Bakery shirt on. To me, that is brand pride. So let's get to know you. Take us to your career developing at PepsiCo formal alma mater of mine as well. Probably one of the greatest companies to learn at then leading sales at Henkel. No easy job. And then Nature's Bakery now to actually leading it. And so talk to us also about in that journey of growth, what leadership principles have served you well.
- [07:01]
Steve Gardner
Sure, yeah. Thanks very much. And I'll just start by saying the greatest joy of wearing a shirt is the people that want to come up to me and tell me their story about the product and the brand, which happens all the time, which is just crazy.
- [07:12]
Peter Vs. Bond
Then I have to interrupt you right away and tell you, and I think I told people I was working with from your PR team that my favorite was fig bars. But now I'm experimenting Apple cinnamon.
- [07:24]
Steve Gardner
Perfect. Thank you Will take that. So myself I've got 30 years of CPG industry experience now and I actually like to start with just this. The quick story that after college my best friend and still to this day, and I turned down our somewhat cushy job offers and started our own food and beverage distribution company. We did a couple of them and sold them, moved on. I say that not because it made me wealthy and it lives on, but because that entrepreneurial streak that I had as a kid that kept with me all through college, college and all things we did, believe it or not, even though I've been at huge companies and now small, that that entrepreneurial can we do it differently, can we do it better, can we do it faster? Lives on consistently. So that's sort of in my blood. My first major role after we had those companies was at Tropicana. So Tropicana Orange Juice, which then later got acquired by PepsiCo. So I know you have PepsiCo experience in your past as well, and we were there a little bit at the same time. I don't believe we crossed paths in, in the same exact meeting, but what a great company. I spent 24 years there. I was always focused on the Quaker brands, anything with a Quaker name on it. Life Cereal, Oatmeal, you name it, Tropicana, Naked Juice, Kavita, and then Gatorade and Propel. So working on those brands allowed me to move every two to three years, I mean literally move. I move seven times with a, with a company around the country in the sales world, calling on different customers, different regions, different territories, different types of go to market. So it really helped me hone my skills. Internal jobs, external jobs, integrations. We were the at times the acquirer and at times we were the acquiree and what an interesting process that is. And also I had a really great few years working on joint venture. So I left PepsiCo and I went to Henkel to help them stand up a new sales team on their beauty and personal care side, structure it and also relocate from Scottsdale, Arizona to Stanford. So it's kind of a build it, shape it, fix it assignment was great. But for me it just really cemented in my head that I wanted to get back to food. I wanted to get back to food better for you and a fast growing business. So it was like a, you know, a pure moment for me. And from there I, I joined Nature's Bakery as a head of sales, you know, fundamentally to help them grow their business and lead to an exit and an acquisition. We were, as I said, bought by Mars at the end of 2020 and I became CEO in 2021. So, you know, that's me in a nutshell. And you asked about leadership principles and just reflecting on that a bit. You know, some of it's certainly what I have explicitly seen work myself, but a lot of it, if I'm really honest, has been shaped by the amazing leaders I've been around and, you know, taking tidbits from them as I sort of form my own personal style. I would boil it down to three things, which is, first and foremost, leading with candor and transparency. And that's not a throwaway comment, but I really, really believe that we can't be as successful as we could be as a team if we're not all really clear on what the mission is, what we're saying we're going to do to get there, and whether we are getting there. What are the objectives, what are the strategies, what are the goals, and what are the metrics and how are we doing? So it's, you know, it's as simple as a cadence of communication. A monthly town hall that's not about beautiful PowerPoints and shiny pictures only. It's about, hey, here's where we're at on the goal. Everybody understanding their contributions to that goal and how we get there. Related to that is empowering the team. If you empower your team, it really helps build that accountability, which is something that we were missing a little bit when I took over, was that people weren't sure their voice mattered and they weren't sure that what they had to say would be listen to our relevance. So it's a little hard to feel ownership and accountability if you're feeling like your voice doesn't matter. So we really focus hard to make sure everyone knows we're in this together and their voice does matter. And then lastly, very hungry, energetic, and results driven. I mean, we're here in a lean organization with not many resources to drive make big stuff happen. So I want that aggressive, hungry, let's go do it. However, I want it to come with a low ego style and execution. So sometimes they may seem like they're competing hungry and aggressive at low ego, they're not. And you can find a way to make sure that it's more about the team winning as opposed to individual people thumping their chests. So that is me.
- [11:53]
Peter Vs. Bond
I'll tell you, Steve. You know, it's a lot of people come on the show and they talk about clarity of vision. You certainly did, you know, about energy and mobilizing around results and being results focused. Almost everyone. Very few talk about empowerment and very few actually demonstrate it in real life. So it's exciting. Also great to hear that empowerment is important. To you. And giving people a chance that they've not just that voice to be heard. It starts with voice to be heard, but also follow through with asking the lead and actually execute in the marketplace matters equally. Now let's talk a little bit about Nature's Bakery itself. Right? Our audience would love. You know, typically everyone thinks of the fig bars. They're easy to procure, they're in distribution everywhere in store. Online you can find those you look for better for your products in search, they're popping up. But tell us about the entire portfolio and then especially as you do a three year outlook or a year's outlook, what is your approach to innovation? Are you constantly looking at the next right trend? Is it a food trend? Is it a health trend? And then talk to us also, what's new for 2025? What can we find in store?
- [13:02]
Steve Gardner
Yeah, sure, I'll do the easiest one first which is what do we have today? So as I mentioned earlier, we have these amazing fig bars of all different flavors and sizes and packages on the go, C store, airport, et cetera, as well as mass and grocery and club. But beyond that, we also have a line of gluten free fig bars. We have three amazing flavors and you know well and truly, of course, yes, I love the product and I love all my children, but I would stand our gluten free fig bars up against any other gluten free snack. I think our team has found a way to deliver an amazing tasting product with all the health benefits, all the attributes of gluten free. So we're really proud of our gluten free line and continue to lean in on that. We also have a subline of brownie and our brownie is actually made with dates as well. So when I talk about wholesome, better for you ingredients, that's not a fig based product, a date based product and it tastes pretty amazing. It's a double chocolate brownie. And then we followed it on this year with a second flavor as well. And we see more future in that. But then our fastest growing subsegment now is oatmeal crumble which we snuck into the market in mid-2020, which unfortunately you may remember a little pandemic at that time. So it was a little bit of a crazy time to launch that product, but it's just done amazing and it's our fastest growing by far and it's really opening up a whole different occasion within the day for us. So super proud of that. And those are the four lines that make up our current portfolio. When we think about innovation, our approach, number one, is that it's just got to start with a consumer. Consumers are at the core of what we do and what we bake. Reflecting back on this year, this past year, 24, we launched Fig Bar Minis and we launched a salted caramel brownie. So first of all, Fig Bar minis, we're not the first one to bring a Mini to market, nor do we think we are. So it wasn't like a quick, hey, we should throw a Mini out there. It's like, well, what do our consumers say? Our bar already is two little bars in a package. Does that make sense? Does that resonate? What's the occasion? What does mom think of that? So we wanted to make sure that it did make sense. And our consumers told us it did. And we heard yes. We have a desire for portion control. We have a desire for our kids to have a little smaller pack to take to school or wherever it may be. So we brought Minis. Based on the consumer learning and research. We also I mentioned double chocolate brownie. Based on the success of that and based on the real boom behind this wholesome indulgence relative to Brownie, we launched the second item, which was the salted caramel brownie which hit this year and run a number of awards on a great new item. So those were the two from this past year. But as I think about further out, like the big picture innovation we're working on for year two, year three, again, it's the same answer. It still has to start with the consumer. It has to start with the consumer need and it has to start with our relationship with our consumers and where they see that we have a right to win and expand into. We're focused on that intersection of wholesome and delicious. And I'm probably not the first to say that, but I maybe one of the first to really mean it. And it's in our core and it guides everything we do. We look at a lot of data as we evaluate innovation options because there's many options. I mean you can take the strategy of throwing things out there and seeing what sticks. That's not our play. So we look at consumer buying patterns, we look at consumer preferences, we evaluate that versus our own ruler, if you will. It helps us spot opportunities and areas for product innovation. And you mentioned earlier trends. So we do absolutely try to stay on the the front end of consumer trends insights to help marry with that sales data and really see what's out there that might stick. Places like next month, Expo west, you know, great place to walk the floor and just see, you know, where, where the energy is and where things are coming as well. But for us, back to the comment earlier, I'm not throwing things out there. It's really important that it's on brand. Anything we do is on brand and not out of the scope of what a consumer would expect from us and that it's trend not fading. You know, we, I've been in customer meetings a few years ago where like, wow, this keto thing is taking off. You need to, you need to get in that keto space. And we're just like, that's, that's not our target, that's not our space, that's not what our consumers would, would expect from us. So that wasn't interesting to us. But what is interesting to us is as we've done our research over the last year and looked at the, the data and looked at opportunities, we see there's real white space for a soft baked bar that is made with additional protein so that we can do. And we found a way to do it that tastes great and is with our continued pledges, nut free and plant based. So we're gonna have a nut free, plant based, protein enhanced product. That data led us to our big launch for this year which is going to be branded Hardy Bars. And so you are the first CPG guys and you are the first guys to hear about our new launch which is coming in late spring, early summer of this year, which is our Hardy Bars line which will initially at least a blueberry and a chocolate chip that we're really excited to get behind the launch and anxious for you and others to taste.
- [18:13]
Peter Vs. Bond
Absolutely. Steve, a few things that I'd like to kind of reflect on. Right. Protein, one of the hardest, I would say ingredients, one of the most important ingredients in our palate today that should be part of everybody's diet. And I would say excess quantities, that's just my observation, doesn't make it right. But also the hardest to kind of get from the taste aspect. And I remember my chief innovation officer, head of R and D would continuously remind me when I ran sales for General Mills North America, excellent. But if the product doesn't taste well, it's not going to move. And she wasn't wrong. So what's the magic behind the taste? You don't get to say more sugar.
- [18:58]
Steve Gardner
No, we definitely don't say more sugar. The magic is our product development team, frankly that, I mean I'm sure early versions were less exciting, but they have honed in on A phenomenal tasting product. We're not. Our goal isn't to be the highest protein in the market and to be the highest protein offering out there by any means. So we are using a fava bean and sunflower protein which allows us to stay within all of our claims and yet deliver that taste and deliver what mom's looking for, which is an extra boost on the protein side.
- [19:31]
Peter Vs. Bond
And so you're welcome to come back when the actual physical launch launch happens and you're in store and you have distribution. You're welcome to give us links. We will showcase it here on the CPG guys. Are we thinking per serving like above 5 grams of protein?
- [19:48]
Steve Gardner
Yeah, we'll have 9 grams of protein.
- [19:50]
Peter Vs. Bond
Fabulous. So we'd welcome it on the CPG guys. Let us know and let's get the message out to our CPG and retail audience. So now let's move from so fabulous portfolio. Look forward to the hardy bar. Love the protein based approach. Must do in any snack bar portfolio. One of the ways you're going to kind of capture the consumer, kind of bring attention to it is Omnichannel, which is both the in store element as well as all the online elements. Right. So when you talk to your leadership team, people who report to you, how do you look at Omnichannel holistically? Is it a mission you send them on and then how do you coach them to build true 360 plans that captivate the consumer online and offline?
- [20:37]
Steve Gardner
Yeah, for sure. I like to think I provide solid coaching and guidance and I'm a good foil and balance for discussions. But I gotta be honest, I've got a really fantastic team, especially in the world of marketing. And they're so savvy. They're bringing me these ideas and we're working through them. They've done a phenomenal job. Nature's Bakery. Despite the great success we've had, we don't have massive budgets. We don't have massive budgets. So we have to be really smart on how we deploy the dollars that we have. So our strategy is to target different community segments through various channels, through various vehicles. We ensure to get broad reach and impact and everything we do is done with intentionality to continue the conversation with consumers. So where possible, yeah, let's build a 360 integrated plan that gets people at the shelf, on their mobile, in real life, wherever that may be, and kind of bridge that gap between online and off. I probably pick my favorite two examples of that. Last year. Yeah, last year, early last year, we partnered with The Dirt. I don't know if you're familiar with the Dirt, but it's a mobile app that helps families reserve and plan camping trips. So families Outdoor togetherness Camping. We ran a paid media campaign with the Dirt. We offered free nature's bakery bars at campsites around the country. So as people are actually in the campground now, you run into our product and you run into this program. And then we had exclusive discounts on our website that was linked back to that. We also did. We collaborated on a co partnered social media giveaway where people entered to win camping and outdoor equipment. So another, you know, another link and a tie in and it also sent them to our website as part of the entry into win. So this encouraged people to engage with our website, possibly join our loyalty program, which by design gives you a lot of different ways to continue engaging in our brand and shop, et cetera. And then from there our email communications invited those consumers to, to follow us on social, shop online at our site, leave reviews and we can just keep that conversation going with them. So it literally started outdoors and ended up on our website and hopefully in their pantry with a product. And we're really happy with that. And then secondly we also last year, but we've done the version of this now multiple years. A good example of building omnichannel experience was through field sampling. So we called it our summer Sidekick tour and we had a team that traveled country and distributed nearly a million samples across 14 cities. So they would show up. It could be like a county fair, it could be like a small art festival, it could be at a nature trail. Beyond driving that trial, by handing a product with our highest value consumers, we're able to bridge that online offline gap by running a sweepstakes that we amplified with pr, with social media and with some influencer coverage to bring consumers back to our website and again engage with us on social email shoppingb.com so we did all that and then we also did like a high level national paid media program that highlighted this summer Sidekick theme and kind of called out where you could find it and how you could find it. So those are two of examples of many. But again, marketing team has done a really nice job of building that entire wheel. And I could probably talk about a few where the final step in the process was when you went to Target or Walmart and you did your curbside pickup. There was a sample in your bag when you did the curbside pickup. So they've really done a nice job of leveraging the full wheel, you know.
- [24:10]
Peter Vs. Bond
Steve, very few have come on the show and talked about sampling it. Sometimes I feel like it's a forgotten art other than Costco, who still does it right to the day through that demo program. I love that you guys have taken sampling so seriously. There's no better way than at the point of purchase for somebody to try a product, pass judgment on it and then bring out their wallet immediately. But there's also no greater way in getting lower funnel activation than doing that psychologically. Once someone samples it, they believe they have to buy it. So I'm going to applaud on both of those. I believe it's a lost start. And those that actually, especially in a volume challenge environment, those that sharpen their muscles on experiential sampling are going to definitely emerge winners, especially as the bars come out later. Protein bars, hearty bars come out later this year. I trust you're leaning on sampling as a backbone. Is that.
- [25:05]
Steve Gardner
Yeah, we need to, we need to, I mean it's, you have to find a way to do it. If you believe in your product as much as we do and if taste is such a towering strength, I think we need to do it. And so yeah, we're out there for sure. And you know, to your point on the funnel, we're still relatively very low awareness. We've pushed our household penetration up nicely. Our repeat rate is great. So let's put the product in people's mouths and they will come back. And that's, that's our.
- [25:28]
Peter Vs. Bond
Well, that awareness, I promise you, is going to change after you've been on the CPG guys. So I wouldn't worry about it. And off the record, I'll also tell you, even though we're on the record here and this is going to be live at some point that at General Mills I was following you. So it's not that the industry doesn't know of you and I'm sure that's music to your ears at this point, but that's the truth. So let's just dive, dig, dig deeper into that. Right. You mentioned obviously smaller budgets because you're in the growth stage, scaling stage of the brand itself overall. But your competitors, and I was a competitor of yours, much deeper, larger market cap media pockets. You gave the example of localized, hyper personalizing targeted marketing. But how do you fight or how do you compete with those deep media budgets and become the challenger kind of that is fast growing to be equal presence or more on the shelf because you are in a better for you ecosystem.
- [26:28]
Steve Gardner
Yeah, for sure. We are not the highest funded competitor out there. And we kind of take that as a badge of honor, frankly. And we fight and hack our way forward to carry the message. We're confident in our skin and we know who we are and we know what our product stands for and we're continuing to find ways to make it when you probably won't see a television commercial for us anytime in the next, whatever, five or 10 years, it just doesn't make sense for us. And we can get so much more drive from the dollars used elsewhere. But how do we succeed? Again, amazing products, a consumer first approach and a great team. I think we have a distinctive team that is still in that scrappy, entrepreneurial startup insurgent phase as opposed to just, you know, big company. What's my next brand to go work on? They really, we've got a really different kind of mindset here that at times you may find frustrating because the lack of resources, but 90% of the time you're like, this is great. I'm actually making decisions and making stuff happen and driving it and that brings that energy to the business. I touched on this earlier, but our appeal as a company, Nature's Bakery, our all family appeal, has really three legs to the stool. One, are those better for you ingredients? One is the great taste and the third is accessibility, which is both being in all those points of interruption that you listed earlier and being findable. But it's also value. We know we need to be a great value and remain a good value. And we work like hell to make sure that even in a crazy inflationary environment, we're doing everything we can to make sure that our product is still affordable for people. You shouldn't have to have a premium price tag if you want a better for you product for your family. And we take that seriously. And we're always trying to make sure we can play that role. We know if we get out of balance on any one of those three things, it's not going to be as successful. I could make a phenomenal tasting product that has massive amounts of things in it you don't want. And I could make an amazingly healthful product that your kid's going to bite once and not eat. And I could make a great tasting product that's $4 a bar and that's also not going to work. So for us, that's the starting point. Just remain, understand who we are and be very, very true to it. And then with the product itself, our commitment to those quality ingredients for all our products, and you may know some of this, but certified Vegan, vegan, dairy free. We're one of the few out there that's truly nut free. Not only made without nuts but made in a dedicated nut free facility. That's the power of being vertically integrated as well and having our own Bakeries. We're non GMO project verified. We don't use any HFCs. As I mentioned we have a whole gluten free subline. And for any of our items that have cocoa so brownie or the new Hardy bar chocolate flavor chocolate chip, they're Rainforest alliance certified. So so again we talk to our consumers. Those claims matters. We go and source those ingredients that trust me cost a lot more than the cheaper ones that we could easily buy. It's about making the right product. So we're so focused on delivering these delicious products. The Hearty bar is probably a great example. Consumers looking for a better for you snack option that has protein. We don't want to be a niche item meaning where we started to where we are now. We're widely available and you can find us everywhere across the economic spectrum of shopping, across all different channels. That's important for us to be able to help families incorporate us into their daily lives and for us to continue to have this standout appeal, you know, across all, across all age groups. So long answer. But our approach as we're up against some real industry titans is just stay laser focused on the tactics that resonate with our consumers. Meet them where they are and and as we think about what to do with that marketing budget and how to deploy it, our rule of thumb is 70% of it is going to be spent against proven tactics. So proven products that we know will work well, proven targets that we know will respond. Proven vehicles that we know have an impact that we measure and are good. So 70% keep to the tried and true and keep proven 20%. We will start to use emergent spaces and things that are just starting to break through that are newer to us or newer to the market that we want to get into. And then we keep 10% for really test and learn things that are kind of out there and maybe amazing or may not be amazing, but we want to make sure our budget deployment doesn't get out of kilter because it's important those dollars continue to work hard. And that's how we've been able to increase our penetration so much. And then on the back end I'd be remiss. We're not totally self sufficient. We're staffed strategically with some key agency partners that help us be nimble and agile and activate really quick off relative to category.
- [31:00]
Peter Vs. Bond
It's awesome to hear the brains behind the reason for the success here. So a reminder to audience. I'm speaking to Steve Gardner, CEO of Nature's Bakery. So let's talk. You gave glowing praise to your teams. Let's talk about talent development. A good leader would do that. A good leader surrounds themselves with people smarter than them in functional areas and then learns from them. You've already said empower them. So what do you look for in leaders and how have you structured so that you're not focused just on the quarter and the month, but also more longer term because you're in a true excellent growth phase for the brand?
- [31:37]
Steve Gardner
Yeah, I'll start with the last part first with a quick shout out. Honestly, our owners, you know, being owned by Mars, they're extremely savvy and they give us the space to perform and do what we need to do. And I know they're there as we need resources or help or support in a certain area, but they've been really, really smart at allowing this become what they wanted it to when they bought it. So I think that's a key starting point on structure because it also means, you know, back to your question on talent that I'm looking for those scrappy, insurgent mindset folks that want to roll up their sleeves and get stuff done. So one of the lessons I've learned over the years is that it's relatively easy to shine in an interview and be a good interviewee, but then not really back it up in real life. So the art of interviewing for me and my team is more important than ever to really get to what motivates people, how are they going to fit with our organization? Are they really willing to do things they might have done 15 years ago in their career and roll up to make it happen? Because that's what we needed on that day at that time, and that has been really critical is to find that Nature's Bakery values person that is ready and willing and wants and able to join our team. So that's, I'd say is number one. Retaining and developing talent is a huge priority for us and ensuring that the team is ready for long term growth. I mean, this is a big sprint for us. I mean, we're not late in the ditch and hoping sales happen. We're out there driving and building and growing and we have big aspirations for the future. So the rapid growth of our business and our size of our team, we've done a lot of hiring, reflects that Brand's success and our long term vision. I shared a couple numbers earlier, but in 2021 we were just a 4 share in the category. Today we're an 8 share. So we've doubled our share over those last three years, which is a real testament to the vision and the long term strategy. So what I look for is leaders who are growth minded, solutions focused, who foster strong engagement and generate genuine enthusiasm with their team. Because I'm not going to be in every meeting and they're not going to be in every meeting. So it's got to be contagious all the way through the organization, which feeds back to the transparency that we talked about earlier. But that's how we're going to keep innovating and be successful together. Leaders need to create an environment where people feel appreciated, empowered, motivated to challenge, push the boundaries and they've really got to be aligned to the brand and the brand commitment. And you know, you asked me about the shirt earlier and I talked about consumers. We have that same kind of dynamic internally where we hire someone, in the middle of the interview, they just stop and they go, I just want to tell you I love your product. It's in my pantry, my son, my daughter, my aunt, my grandpa. So there's like a genuine passion around the project, a product that I think I know really fuels our growth as well. And so all of that, and maybe just because of a little bit, tiny bit, my wiring is we want to really keep nurturing that entrepreneurial culture that, yeah, we're, you know, a multiple hundred million dollar business. I got it. However, we've got to keep thinking about being lean and hungry and continuing to run the plays that, you know, got us this far where it makes sense. So we want people to feel empowered to challenge the conventions, poke holes, ask question and contribute to the brand's growth. And as I said earlier, the low ego thing is really important to me, to the team, is that it's never about me or you, it's about us and what we can do together. So yeah, that's how we look. Whether it's a leadership team member or if it's a new manager for the team, we need to know that they're gonna wear the jersey with pride.
- [35:14]
Peter Vs. Bond
Approximately two years ago in the Authority magazine, you had put out your sentiment on food. Brands need to really think about five things to be successful. And while reading through them, I really enjoyed it. And I believe it's true to the day and I believe it'll truly be true to tomorrow, day after and be Immortalized. I think our audience would love to hear from you. I mean, you start with you have to have a good product. I think we can't disagree on that one. Right. But why don't you decompose for us? What is a good product? Product what the other four are all the way down to resilience. Because I thoroughly enjoyed reading this piece.
- [35:50]
Steve Gardner
Well, good. I'm glad you did because I haven't changed. My five is my five, so it's still the same. But yeah, they, I mean the great product, again, that, that can sound like a throwaway because I, I see plenty of good products with a great package or I see pretty good products that have done a great job of finding a way on shelf. But at the end of the day, if it's not a great product that is loved by consumers and that they want to seek, it's just a matter of time and you won't earn your space on that extremely high demand, in demand shelf. Whether it's the digital shelf or whether it's the bricks and mortar shelf, if you're not performing, you're not going to be around very long. And so yeah, it really does start with that great product and building a brand and a product that is differentiated and nuanced and has real bond and love. And there's other examples out there. The second one that I had talked about was knowing your consumers and your category, but just not knowing them, but to be obsessed with them and be obsessed with who is buying your product today, why are they buying your product? What else are they buying? Why do they buy that? What are they looking for, what's going on in their life. But if you're too focused on number one, on the product and forget about number two, then also you'll leave something on the table and leave something behind. So the category and consumer.
- [37:07]
Peter Vs. Bond
One of the things Steve, I did want to ask you on number two, which is know the consumers. Do you guys do shop alongs? Do you encourage shop alongs? Because I feel it's one more of those things like experiential sampling is a lost start.
- [37:20]
Steve Gardner
Yeah, we do shop alongs. We do a lot of things in the store. And even beyond the formal process and the learning that comes with that, we also do it informally. And maybe this comes from my roots of more retail. But there's not many big meetings that I'll have, meaning people travel and come to a meeting that we won't allocate 2, 3, 4 hours to just go hit retail and bump into consumers together. Because I Don't care how much data and analytics you have, but, you know, the rubber hits the road when you're standing in front of the shelf at your local store and you're looking at you and you're looking at your competitor and you're looking at the display down the road and you're looking at what's new. And then you run into someone, you ask them what's going on it give them a coupon, get a little feedback. I find that super exciting. So a team, a smaller team of ours met earlier this week and they did the same thing. They carved four hours and spent the whole afternoon plowing through retail. And for us, that never means let's make some stores pretty and go, you know, pat ourselves on the back that they look pretty. But let's just go and see what's real and what's really working and what's not and what we like and what we don't. So, yeah, that. To your question on Shopline. Absolutely. It's part of being consumer obsessed, for sure. The third one I talked about was a defined brand mission and vision, which is really just locking in your brand beliefs and what's important to you and if you will, your guardrails and living and breathing. And a little of that goes back to the comment earlier on not chasing fads, but being on trend. But from time to time, we'll find us working a project and get a little down the road and we have to take a moment, sit back and go, does this still lock in and align with the mission and the values we set? Because that's easy to just iteratively get a little bit off course. And we want to make sure that doesn't happen and we start to mean. And then the last two were more about the cutthroat nature and the challenging nature of trying to build a business in this world today. And that was number one, was to be flexible. You've got to remain really agile from process to planning, and the key to staying course. And you got to be resilient and stay focused on your goals so that you can bounce back as things change. Everyone's heard the quote 100 times, but everyone has a plan until you get punched in the face. But, well, we believe that we have beautiful plans and then they take a pivot on day one, you can't go back to the full drawing board. You gotta be able to adapt and pivot and go from there. So, yeah, I think those are as true today as they ever were.
- [39:37]
Peter Vs. Bond
Thanks for that, Steve. So, first of all, Again, I'll say congratulations on the share growth from 4 to 8. That's a big fricking deal. But no fast growing company exists without its share of challenges in the marketplace. So love for you to share. What are some of those things? Headwinds. Headwinds that you're mitigating. And then how are you adjusting your strategy? You have a big launch coming out with the Hardy bars. Obviously it's a huge big bet. But how are you adjusting strategy to mitigate what you're seeing as challenges in the marketplace?
- [40:07]
Steve Gardner
Yeah, we have no headwinds or challenges. Next question, please. We're good. Yeah, we have many. I mean, that's part of the fun, honestly, is navigating and figuring them out and anticipating them and working to avoid them and all that good stuff. But I would say two. I, I mean the first one is a broader one and it's the category that we play in is stagnant right now. It's been slowing and you know this, it had a nice little spurt during pandemic times when people were snacking more at home or whatever. But the rate of growth has continued to drop and to the point now it's flat. So there's a lot going on in the category. There's a lot going on with consumers, it's a lot going on with snacking habits and what they choose to do. So for us, we need to continue to stand out with our great product. We grew 26% last year in that stagnant category. So I don't say that from position of arrogance. I say that what are we doing that's working and how do we do more of it and make sure we continue to play that role. We have to continue to use the data that comes out of that to be able to tell the story to our customers. And I always say we have to be able to speak retail really well. And I don't ever mean that in that deceptive way, way of, you know, let's weave a story that you know is convincing but not grounded in facts. I just think sometimes we just get so caught up in our own world, you've really got to put yourself in the target buyer, the Kroger buyer, the whoever, Whole Foods buyer. And what is it they're trying to get accomplished in their category? What is the role? How can we support that? How do we help bring that to life? And then what's the data we can use to show them the story of, you know, why we are being successful? It's not a share. I mean if they're not interested in a share swap, no one's interested in a share swap. I'm not interested in a share swap. I want to grow the business. So I shared a number with you earlier of 26%. So that's the fastest growth of any top five snack bar in the US and even though we're quite well distributed, we grew our points of distribution by 23% last year by adding extra items like getting new stores, whatever it is. Because retailers think our story resonates with their business. And I think that's the key that we can't lose sight of. We got to stay true to. And then maybe the. I'll say the most impressive number, but the one that I take a lot of pride in is of our growth. Nearly 60% of it is incremental to the category. So that's those incremental occasions, and that's that household penetration growing. It's not a swap, it's an incremental play. And that's why we want to continue to push and drive. So challenge one is just standing out and winning in that stagnated category. But the second one is more personal to us, and that is is now that we've earned that trust with retailers, we need to be a good supplier, we need to be dependable, we need to be reliable. And quite frankly, inventory constraints, for us, production limitations have been a challenge for us on and off over the past few years because the growth just is unrelenting. And that's a great thing. Thank you. Please. Might have another. But that's not good. If a retailer takes a bet on you and then you can't fill their own order, and that's a problem if a consumer was engaged by something that you did or heard from a friend and went to the store and stood in front of the set and there's an empty spot. So for us, we've got to really attack that. And we're pretty much, you know, at the peak or near a peak of our capacity. So if anything goes wrong, all of a sudden we have a hole and we can't have a hole. So for us to be the brand that we want to bring and we want to be in the future, we want to have. We've got to continue to build out our distribution networks. So our current bakeries are bursting at the seams. There's no more room in them. So we're really excited. You may have seen we're building a new factory in Salt Lake City that will actually start producing sellable product just in this summer. So that won't instantly help overnight. But that factory will now allow us to take some pressure off the other sites and fuel the growth plans we have over the next four or five years. So I don't like having to have conversations with customers about why we didn't ship them what they asked for. And we've got to get that behind us and they need to know they can count on us.
- [44:12]
Peter Vs. Bond
No doubt about that. Steve. The new factory in Solid should make a big difference in terms of fulfillment. But I gotta imagine that is also bringing, because of the capex for the factory, it's bringing its own share of pressure. But you've rightfully already pointed out that winners in the space due to the stagnancy of the category are going to be either share winners or those bringing in consumers from adjacencies trials. New to category, new to brand. Think so. I wish you much luck in that growth. Let's wrap this up by asking you, if you look at other emerging brands around you, not necessarily snack bars, but those around you, what advice would you give to leaders? You've already talked about five things for a food brand, but I'd ask you, macro, what advice would you give?
- [44:54]
Steve Gardner
I'm gonna take for granted or just accept that all the things we talked about earlier about having a great product loved by consumers is a given because I think you can have that and still muck it up if you don't have the right team. So for me, the answer would be all about team. And I think as a CEO for certainly it's about going above and beyond to build and connect with your team and to establish trust, encourage an open dialogue. You know, I talked about having a cadence of sharing and transparency earlier. So when I became CEO, I personally called all my new team just to kind of energize them about this new phase we were going into and being part of the brand. And I set the tone with them on, you know, the open door policy, which again, could be a bit of an old cliche, but. No, I really mean it. If you need me, call me and, you know, we'll connect as often as we do. But it's not just my leadership team. It's, it's skip levels, you know, a few levels down. It's when I go to one of our facilities like I was in Pasadena this week, listening tours, what's going on? What's the real vibe? I think it's all part of it and it's an important part of it to really make sure you get it. I'd like to say, and my friends would absolutely agree, I did not get any smarter when I got this job, job. But I certainly noticed that more and more people said, oh Steve, that's a brilliant idea. Oh, what a great plan. And I don't need that, we don't need that, that's bad for the company. And I didn't get any smarter. So poke it, challenge it, you know, tell me what's really going on, let's talk about it and understand it together so that we can win together. And I think as a CEO, sometimes that's challenging, especially as a founder CEO, you've got to be open to challenges from a diverse range of thought. You've got to be willing to challenge others in a non threatening way because they see that we reward that good behavior. We don't chastise, we reward it. And it's actually how we all get better. And then I think to me, a lot of founder led companies are understandably, completely understandably, more top down, autocratic directive because that's how they achieve success initially. But when you reach a certain level that stifles creativity, suppresses ideas, so you've really got to turn that corner and make team members feel appreciated, heard, valued. One of my favorite leaders of all time, my favorite bosses used to always say, fierce internal debate, one external voice. And if you're unknowingly hindering the fierce debate, you're going to limit your potential and you're not going to have the full ability and you're not going to reap the full capability of the brand and the company. And for people feeling great, I'd just say lastly, if I have time for one more thing, it's just as a CEO, stretch for what is possible, possible and don't limit yourself. One of the things we do at Nature's Bakery is we talk about our objective for the year in a really bold way. So I think a lot of companies will say, what's our plan for next year? And I'll agree that our plan Is to sell 100. And then you work through the year, you try to get, maybe we can get to 102 or even 105. Wouldn't that be great? And if things don't go well, we might be at 97 or 98. Well, we build our plan and we know what the hundred number is. But then we say, well, what could we really do if, if we kick ass and have the best marketing of anything and anyone in this category, what can we really do if we achieve the top end of our sales objectives. Why really do if we run the best factories and have the best efficiency, what do we have the best people? And so what would that number look like? And I don't want some aspirational throwaway number pie in the sky, but that number becomes our goal. And that's what we talk about all year. Every single period when we get together, we talk about the goal and then, yeah, we're probably behind it and chasing it all year because it's our absolute stretch. And that strategy, I just think unlocks a different mindset in the company versus is what's good enough and can I beat it to what really could be possible and how do we get there? And that's that's been a big part of our success at Nature's Bakery and hopefully why a lot of people still want to work.
- [48:39]
Peter Vs. Bond
Well, congratulations on all the success. Let me remind our audience that you can find all of our content on the URL cpguys.com if you or your company has some thought leadership to contribute to a community discussion, do drop us an email@contactpguys.com that's again contact@cpguys.com and maybe you can join us on the podcast like Steve did today. Don't forget to drop us a rating again both on cpg guys.com at the navigation bar up top or on Apple Podcasts. We really value that and thank you for that. To our followers on LinkedIn. I can't say thank you enough times. When Peter and I started the show, we started this for fun. Now we feel it's our responsibility to continue to educate the industry. You made it happen in you follow us, you DM us. And I can't say thank you enough times. Steve, congratulations. Good luck on sustaining growth in a better for you category. Thank you also for appearing on the podcast.
- [49:34]
Steve Gardner
Thank you Sri. It was a pleasure. Thanks for having me.
- [49:35]
Peter Vs. Bond
That's a wrap of this episode. See you soon on another episode of the CPG Guys.
- [49:49]
Shree Rajagop
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