NY Launch Pod: Welcome to the New York Launch Pod, the New York Press Club award-winning podcast highlighting the most interesting new startups, businesses and openings in the New York City area. I’m your host and New York attorney Hal Coopersmith and in this episode we are speaking about cold brew coffee. Matt Bachmann and Ben Gordon, co-founders of Wandering Bear, step back on the New York Launch Pod. It’s been seven years since we spoke to Matt and Ben in Episode 4, can you believe it, our forth episode? Since then Wandering Bear has grown into a massive premium brand with distribution across the country. Here’s Matt Bachmann:
Matt Bachmann: I think Starbucks and Dunkin put cold brew on the menu in 2016. So like a full year after, we had our initial conversation. We’re differentiated, I think at this point more than anything by brand and quality of product associated with the brand. We do sit as a premium on top of brands like Starbucks in our category and, we’re among the few that can really deliver on the promise of being as good or better than what you’re buying at the coffee shop at, really unparalleled convenience.
NY Launch Pod: Listen to the episode to find out how Wandering Bear has grown in the seven years, made it through the pandemic, the decision to take on outside investment and a whole lot more. It’s in an episode we call How You Doin’.
NY Launch Pod: So you guys were one of our first guests back in 2015, we were just talking about how a lot has changed in the world. A lot has changed in our lives, but a lot has changed in your business. Can you tell us a little bit about how Wandering Bear has grown?
Matt Bachman: Of course, and thanks for having us back Hal. But I think at the time, I bet a lot of our time was spent talking about scaling up production, right? And just like the challenges of being an early food brand manufacturing, the product you’re selling, so in terms of what our operation looks like today, obviously, far different now being manufactured on a national scale and distributed across the country, but also at the time, the way that we were selling the coffee was primarily to offices and very regionally focused in the New York City, Metro market. An office remained the core of our business right up until the pandemic but as you can imagine, you serving premium offices, white collar workplaces, March of 2020 was not a great business and has remained until very recently a pretty depressed part of our sales mix. And so during that time, during the pandemic completely reinvented the business around when at the time was 1% of sales, our e-commerce and direct to consumer channel. And so we completely rebuilt, retooled, rehired, and, today, roughly 85% of sales are, are driven online and so complete change in how we’re reaching consumers, where we’re reaching them. It’s been, a crazy ride and like in between then, it’s like any small business, lots of ups and downs and left turns along the way, which hap happy to get into, but we are very much running, a much larger, but then also very different business today than we were back then. I will say, the one thing that has stayed very consistent is the mission orientation and what occasion we believe we serve for the consumer. At the time I’m sure we said something to this effect, but it was about bringing a category that Ben and I loved from premium coffee shops from cafes around the city, into consumers refrigerators at home and at work that is still very much what we’re doing today. The place of work has changed a little bit, maybe a little bit more focus on the home, but, café quality, your organic cold brew coffee on tap in your fridge is still what we do, and what we built our brand around.
NY Launch Pod: Well, in the first time we spoke, one of your problems was actually scaling up production and going from your home brew to building more at scale and just the mix and how that was different. But just in terms of what you’ve said, Matt, you had to now scale up a direct to consumer business. What were some of the challenges that you faced doing that? And that’s also in the middle of a pandemic; the main source of your business just went away in an instant.
Matt Bachman: So at the time taking it back into 2020, we were incredibly lucky to have the team we did in place and the partner network that we did in place. I mean, early on, very little changed, we all just developed new skills and some new capabilities to really be able to lean into that opportunity and figure it out together. As that business scaled that then did lead us to needing, to bring on new skills onto the team in terms of both digital marketing, digital product management, product development, user experience, optimization, email marketing, et cetera, and then new capabilities in the supply chain as well, specifically around managing a parcel fulfillment network and being able to, go from selling to maybe a couple hundred large wholesale orders a month delivered in pallets and truckloads to tens of thousands of parcels delivered each month. It’s just a very different competency and requires a different network. And so rebuilding that to serve at the right cost and quality has been a big focus over the past, say 12 months.
NY Launch Pod: So you had to rebuild your distribution channel. How were you able to market to people to say you were in your office drinking cold brew coffee, mow you’re stuck at home and you have all this time, maybe you’re making bread, maybe you’re watching Tiger King, whatever someone was doing during the pandemic. Now you should consume your Wandering Bear.
Matt Bachman: Ben, you really let some of those efforts back in your spring of 2020, what are some of the things that we tried and what worked?
Ben Gordon: Yeah, I would say those first six to 10 weeks, those were the easy days in terms of actually being able to go through those same communication channels that we used to use to interact with our office customers and access their workforces right? So, you know, every company I think was looking for or ways to provide some measure of comfort to their employees to provide some degree of benefits or, perks, or something maybe even just distraction, frankly, but convincing, an office manager or a head of HR or culture manager to send out a promo code and a link to, their hundreds or thousands of employees in spring of 2020, relatively easy to do. And I think those were some good early days tactics that I think willingness that window shut pretty quickly. And, then on, it was about really making sure that we established ourselves and our presence and made ourselves available and seen everywhere that our customers were looking for us and get more generally doing their grocery shopping online. So that meant, you know, onboarding and partnering with new online grocery partners, many of whom kind of expanded rapidly during the early days of the pandemic, it meant really investing to build up our presence on Amazon and other kind of legacy partners like Fresh Direct and Thrive Market, as well as obviously running the paid ad strategy to drive traffic to our own site, as we build up our core direct consumer strategy.
Matt Bachman: As we think about it in phases, we had made what ended up being a pretty forward thinking decision and investment in March of 2019 to launch on Amazon. And that year, it was a very small part of the business, we were really getting our feet under us, but what we believe happened right around the time of the pandemic is that a lot of the awareness that we had built up in offices and with the existing business quickly transitioned over to Amazon, we were lucky, more than good that we had inventory, and had inventory set aside that was going to office, that we were able to direct into the Amazon supply chain early and really capture that early bump of demand that helped keep things moving even as in our worst week, the business was down more than 80%, right? Like all things in, right in those early weeks in the pandemic, but it quickly moved from being able to capture demand on the awareness that we had created primarily on the coast. Bay area out in California or in New York, some of our larger office accounts to having to generate, demand and create awareness through marketing and that’s really where starting, mid 2020, the process began to put our website true direct to consumer, in a mix of branded performance marketing at the forefront to spread awareness of what we do, what we stand for, and get people into the brand. So we went through a rebranding exercise to get the look and feel of Wandering Bear to be more appropriate for the digital screen, brought on agencies, new team members and really taught ourselves the skills needed to be able to scale up a large consumer marketing function. I think the big transition for many, many years, Wandering Bear was a sales driven organization, and we very quickly became a marketing driven organization.
NY Launch Pod: And the fact that you had to pivot and they did have a brand certainly means a lot in terms of the growth that your company has undergone since we first started talking to you. How have you been able to fuel that growth in terms of creating a consumer brand? Know that you guys took on a fair amount of investment. Can you talk about that a little bit?
Matt Bachman: Yeah, of course. We’ve been very fortunate to work with a group of investors over a number of years now, they have been very supportive of what we are, what we’re building. I think back about the decision to raise capital was making sure at that time that we shared a vision right, for what the future looked like and the way Ben, I would define that is building Wandering Bear into something, enduring enough, a brand enduring enough that it can exist beyond our time running it, that that Wandering Bear could be acquired or transition to be part of a portfolio of other brands and the brand equity that we’ve built, the consumers we’ve built, the niche within the coffee category that we’ve established for ourselves is durable. The investors around the table with us share that vision and it was those groups that backed us during the lows, the lows of the pandemic to allow us to see through a new strategy and they’ve been very excited to stand by us, we’ve got to see a lot of the plans come to fruition.
NY Launch Pod: And I feel like talking to other similarly situated companies, the decision always is if, when, how to take investment, to build a brand, could you, since you guys have raised a fair amount of money, could you talk a little bit more in terms of your decision making process for the investment and how it’s fueled your growth in addition to the investors backing you during the low times?
Matt Bachman: Yeah, there’s really no right or one answer, to the question around whether a brand or a company should take, take investment, there’s the reality that you need cash to operate, and if you’re not cash flow positive, there needs to be some source of capital but with respect to thinking about the decision point that many founders might reach, really, the only advice I have is to make kind of what I’ve said before, make sure you’re align. And I think investors specifically venture private equity angel investors are relatively similar and transparent in what their objectives are, whether it be a multiple of return or return timeline, timeline to exit, their goal is pretty commonly to invest early, create some multiple of value for their investment and to monetize that investment through the sale of their shares or units in the business to either another investor or, to a strategic acquirer, in some cases to the public markets. As a founder, if you’re not signed up to that or whatever the vision is, whatever the investor across the table is being pretty transparent about, with respect to their intentions, the only thing I feel that really matters is that you can sit across the table and truly say that you’re willing to work towards that same set of outcomes, you not just shaking hands and saying yes for the purposes of getting a deal done, but a true alignment, because I think the only times I can really imagine of real stress in that relationship are when investors in management fall out of alignment and that’s one of the most critical ways if you want run the business for generations and investors trying to monetize in five years, you have a pretty significant misalignment between the money you’re taking and how you’re intending to operate the business.
NY Launch Pod: And you touched on how you’ve transitioned from a sales company to a marketing company. What specifically does that mean?
Matt Bachman: So, when I think of a sales driven organization, it’s typically operated by a sales team set of sales managers, where what you’re working to do is create demand in market and sell into large customers, large accounts, typically wholesale accounts that give you access to consumers, so you’re running a sales development process where you’re getting in touch with buyers, developing relationships and pushing product out into market and then through a mix of just visibility created by that push and then other marketing initiatives, be it, a television campaign or a podcast ads or digital ads online, whatever, creating pull off the shelf or through the channel distribution that you’ve created, but the sale, is made to those sort of wholesale partners and the organization is focused on driving volume that way. Marketing driven organization, where we are today, rather than pushing product, we’re creating pull. We’re reaching consumers directly with a mix of brand messaging and product messaging and working to show them where they can find our products, but create the pull off that digital shelf. So whether that be our own website or Amazon or Thrive Market or Fresh Direct, or any other number of sites. And so it’s just going to be a very different skill set, sales tends to be a lot more one to one, right. Marketing is one to many.
NY Launch Pod: And what have you learned about your consumer through your marketing initiative?
Matt Bachman: Wow. What have we learned about our consumer? A lot. We talked to consumers multiple times a week.
Ben Gordon: Yeah. I think the thing that sticks out to me that has surprised me the most about where our brand and products fit in, which has really been encouraging, kind of what we set out to do at the beginning is that at least among our very best customers, what we are replacing or augmenting in there, your every day, is a trip to the coffee shop. Right? So what we had thought for a very long time is that, our consumer might be making cold brew at home already and not wanting the hassle of doing that, they might be buying other cold brew, iced coffee products and, found us as an upgrader and because they liked it better and the behavior where we really fit in, is, stopping or reducing the number of trips to a coffee shop and that really changed the point of comparison for our product. In terms of the value that our consumers see in it when they’re comparing it to something they’re going to pay four, five, six dollars a pop for, versus comparing it to a cake up in the kitchen or a homemade cold brew. And so that has been very consistent now over a couple years and has changed and impacted really how we talk about not just what the product is, but, about the value of the product.
NY Launch Pod: And that’s also been a part of your journey that seven years ago, cold brew existed, but certainly wasn’t as popular as it is now. How are you differentiating yourself from the increased competition?
Matt Bachman: You make a really good point. I think Starbucks and Dunkin put cold brew on the menu in 2016. So like a full year after, we had our initial conversation. We’re differentiated, I think at this point more than anything by brand and quality of product associated with the brand. We do sit as a premium on top of brands like Starbucks in our category and, we’re among the few that can really deliver on the promise of being as good or better than what you’re buying at the coffee shop at, really unparalleled convenience, given the packaging and the format it comes in, right. What’s really continued to work very well for us is the coffee and tap boxes, well, our very first product is still our best selling product line and that has remained a relatively unique offering in the market.
NY Launch Pod: And what do you see as the next steps for the company and the brand?
Matt Bachman: We spend a lot of time talking about different things that we can do or ways that we can continue to enhance the coffee experience, but at the same time, we believe we have so much room to continue to grow and build, doing what we do best. And I think we’ve been rewarded over the past couple years for focusing and continuing to double down on making our extra strong, extra smooth cold brew, iced coffee. And so really focusing on that product line and the formats that consumers are telling us they want getting it into more places, more channels, returning to offices, right, as people come back and those formats, I think it is really the focus right now.
NY Launch Pod: It’s been seven years since the last time we spoke, maybe it will be less in the future, but if this is the last time that we speak, hopefully it’s not, what does success for Wandering Bear look like?
Matt Bachman: The next time we speak, we’re still here doing what we’re doing, right. I mean, it kind of goes back to that point about creating something enduring, right. Success for Wandering Bear is Wandering Bear, continuing to make great cold brew and deliver it direct to consumers.
NY Launch Pod: Well, that is a wonderful note to end things on. We do hope to speak to you next time, Matt Bachman, Ben Gordon, thanks for stepping back onto the New York Launch Pod and sharing your time with us.
Matt Bachman: Thanks for having us.
Ben Gordon: Thanks. Hal
NY Launch Pod: And how do people find out more about you and Wandering Bear and how to get some of that coffee into their home or office?
Matt Bachman: Wanderingbear.com.
NY Launch Pod: And if you want to learn more about the New York Launch Pod, you can visit us @nylaunchpod.com for transcripts of every episode, including this one, and follow us on social media at @nylaunchpod. And if you’re a super fan of the show, Matt and Ben, are you super fans of the New York Launch Pod?
Matt Bachman: For seven years now.
Ben Gordon: We are super fans. We are original fans and super fans.
NY Launch Pod: If you’re an original fan, if you’re a super fan, or if you’re a new fan, please leave a review on apple podcast, it is greatly appreciated and does help people discover the show.
