I'm Sari Kimbell and I've done just about everything in the food industry. I have helped hundreds of packaged food business entrepreneurs and now I want to help you make your delicious dream a reality. Whether you want to be successful at farmer's markets, online, or wholesale onto store shelves, Food Business Success is your secret ingredient. I will show you how to avoid an expensive hobby, and instead run a profitable food business. Now let's jump.
Welcome back, everyone to the podcast. Thanks so much for being here with me today. So it's so interesting, I actually recorded this interview with Brandon, the end of 2020. And we talk at the beginning about kind of those first few weeks, first few months of COVID. And it's so interesting, because when this podcast comes out, I realized that it's actually about a year to the day when we were going under lockdown, and things were so uncertain. And especially in the food industry, with the grocery industry and everything going on. There was a lot of panic, but also a lot of food safety and manufacturing issues. A lot of holes that were exposed, the chinks in the armor, so to speak, and Brandon was really at the forefront of that. So so we talked about that piece. But bigger picture is that while it exposed so many of those cracks in our food safety armor and manufacturing supply chain, what we can really take away from that is that you do absolutely need to pay attention to the food safety aspects of your business. And I love Brandon's quote that he says in here, as I was listening to the interview and editing it, he says ignorance of the law is no excuse. So if you have a packaged food business, this interview is so crucial for you. And if you're not paying attention to your food safety, this is a big problem. So I really hope that you get a lot out of this, I want to say it's a fun interview, because I love Brandon and he is such a mentor to me, and he's a lot of fun to talk to. But we're also going to tell you some kind of truth talk, right? Some things straight up. And I really hope that you take something with you and you reach out to one of us either one of us, and really get on your food safety protocols and make sure those are in place. Let's learn the lessons from 2020 and take them and help make our businesses better going forward. Enjoy.
I am talking with Brandon Hernandez, and he is the co founder of Whole Brain Consulting. And Whole Brain Consulting is a robust team of experienced food industry experts. They provide a wide range of services, all everything from co manufacturing sourcing, contract negotiation, r&d, food quality, food safety, supply chain operations, so much more. He overwhelms me sometimes with his vast knowledge. But I am very fortunate to call Brandon, a great friend and a colleague. So thank you so much, Brandon, for being on the podcast today.
Brandon Hernandez 3:43
Absolutely. Thank you for having me.
Well, I know we're gonna have some fun today. So fair warning. For everyone listening that the swear words may may come out. It is the food industry after all, that is just part of it. Right?
Brandon Hernandez 4:02
I will say if you've been in operations long enough, you have a vast, vast knowledge of the four letter vocabulary words necessary to execute the manufacturer of food production. So yes, this should be it should be rather interesting.
Yeah, I told him to be himself. So I just want to give everybody fore warning. But this going to be an awesome conversation. Because seriously, Brandon is he's a great mentor to me. And I've learned so much. He's my go to guy and very generous with his time. So including today. And I think you guys are all going to benefit so much from our conversation. What is it kind of a typical week look like for you? Either pre COVID or now? Because I know you work in so many buckets. So I guess just for our listener kind of what is it that you do if you were to give us three main main areas that you focus on?
Brandon Hernandez 5:03
So, first of all, thank you very much for the kind words about me, and whatever help I have whatever help I have or haven't been, historically, I appreciate that. And obviously, likewise, it goes both ways. I respect you very much, and entrepreneurships never easy. So I applaud you for getting to where you are today and seeing where you're going. It's been exciting to see that maturation, so congratulations to you. With respect to, you know, the day to day hasn't changed, has it not changed? You know, for us, we were remote service sorted to begin with. So there wasn't really a hard pivot that needed to be made from the perspective of our daily mechanics. I know, for me personally, there was a there was a an inordinate amount of time spent just on FaceTime, and I don't mean, like Zoom calls or FaceTime, or that but I mean, like one on one, you know, personal networking, things of that nature. So that obviously was a hard pivot. I think I'm just as excited for a Zoom call anymore as anybody else. But at the same time, I some sort of putting a face to a name and things like that is important. But realistically, you know, the, the big three things that changed really are just not so much on site time, not so much personal time, just like everybody else. And then for us, I think, you know, just the the biggest pivot or I don't want to call it a pivot, the biggest thing that we did probably the first and I know I do to this day, is if you've been consulting long enough, and certainly if you've been consulting with the same person, or people long enough, you become sort of a psychologist to a certain degree. So tamping down the panic modes that people get into. I think
Yes. I I know that feeling. Like, you know, it's okay. We're okay.
Brandon Hernandez 7:13
Yeah, I think that was the first thing where well, my business partner and I, you know, the first probably 30 to 90 ish days when we were I mean, we were doing TV, and we were doing interviews, and we were doing and I think the biggest thing that we were trying to get everybody is like, look calm down, like the world is not going anywhere, the supply chains not going anywhere. It's just making an adjustment that the world was recognizing, anyways. COVID just was a was either an excuse or an exacerbated an already existing issue. Let it play itself out, let it but making knee jerk decisions, especially in a business environment, certainly for young branded, CPG, things like that, knee jerk decisions lead to costly, costly problems later. And that's what we were ultimately trying to do is just kind of smooth the water a little bit like look, these are robust supply chains are there chinks in the armor? Yes, there are, but it's not to the point that I need you to run around with your hair on fire and start finding 50 suppliers for this one ingredient. That's not, that's not going to be the solve to the problem. Let's work with existing and see what we can find. And everybody take a deep breath because we're all going to be here tomorrow if we're lucky.
Yeah, you definitely bring a an air of calm. Whenever I go to you sometimes I'm like, Oh my gosh, like it's fine. It's fine. So I appreciate your your demeanor and like keeping everybody calm. But where do you like you kind of have I know your Whole Brain Consulting is made up of a number of consultants that that specialize in things what is kind of your areas of that you specialize in? I know you are doing a ton of travel like you said networking and face to face time. But when you're not networking and and shaking hands, where do you focus your time?
Brandon Hernandez 9:13
So I think for for me personally, it was just a pivot to I still talk to people all over the place and still, again, Zoom fatigue, you know, that's one thing but I still talk to people in Austin and in Bay Area and in New York and so Atlanta. So I still network I just I pivoted my approach a little bit. But you know, for for me the the time allocation on is on, you know, number one priority everyday is what's going on in Whole Brain? Is there anything important? After that it's due I have client expectations I need to meet and then third is what can I do to kind of help the environment? Now the the ecosystem in general. So from that perspective, you know, I would have never thought in a million years that, you know, every once a month, you know, twice a month, potentially you do an education events or really tried to take this moment to give back to a community that's given quite a lot to me. And so this was my opportunity to lean into, you know, the Naturally Network, into Naturally Boulder. The hope once we everybody gets their stuff figured out, trying to figure out and help with Colorado Food Works. There's been things that I can do, that I don't have to be in person for, maybe have to get a little creative. But, you know, how do I continue to help Bay Area? How do I continue to help San Diego? How do I continue to help Austin and Chicago and all the places where the Naturally Network is cropping up? But, you know, also, how do I help further in the community here. So, you know, based on our, our relationship, and the relationships with other people, you know? Working with the state of Colorado, and working with Colorado State University and doing stuff for Leeds Business School at CU. So it's been a, it's been an adjustment, maybe it was an adjustment that was coming, that I just didn't see. But it's been a, it's been a good one. And I think it, try and maximize what I can give back to the community before we go back to normal. Because who knows, maybe after all this is over, I'll go back to just be in the co founder of Whole Brain, but for right now, I view it is critically important, given the environment, to use whatever, whatever capital I've gained in the industry to, to kind of push that back down and try and help out, which is why, again, working with all those academics, and with the state, a state of California dairy board, I did, I did some education stuff for them. And then, you know, we launched the black empowerment movement, out of Chicago, where we're gonna, applicants can come in from black owned business. The winner of that there's going to be a pitch slam, the winner of that gets $700- $800,000 worth of free services from basically brand architect from, you know, basically soup to nuts. Whether it's sales and marketing that you need help with, or Operations Support, or anything like that. So we're, again, we took this opportunity to try and build that community aspect to this, because this is the one industry and I know, you know this, but anybody that's fresh to the industry, this is the biggest small industry in the world.
Brandon Hernandez 12:51
If you, everybody really knows everybody, pretty much. If you're, if you're, if you're a jerk, see, I didn't use my, any of my four letter words there. If, if you're a jerk this, this industry has a way of sort of boxing you in, as it were. You know, like, okay, you like you're, you're allowed to make money. But if you're gonna be a jerk, then there's not a lot of people that are gonna want to make time for you. So
Good lesson. Lesson number one, be, be kind, and you just never know who you're going to need in the future and how it you know, if you can help people now how it'll come back. And I think you've been a great model of that, like really giving back and, and your business is growing. So as far as your services in Whole Brain consulting, I mean, I listed a very long list, but you really focus on food safety, and co manufacturing. Is that would you say that's correct? Or?
Unknown Speaker 13:55
I'm sorry, I keep dancing around and other things. So yeah, I started out in food safety, quality research and development, as well as supply chain when I was in manufacturing. So now out in the world, QA QC, you know, food safety items are probably number one, whether it's a brand or it's a manufacturer. Supply chain and an r&d would be a close number two. And then number three would just be co-packing. I will say with the when you're asking about pivots earlier, the requests for food safety and all that, at the very beginning of the pandemic were huge. Like, office COVID protocols, what we do on a facility level? Like we did a lot of that I did a lot of that for a number of Canadian companies, a number of US companies just doing phone calls, like no, think about this. You want to do that. You know, maybe not a foot bath, maybe a Lysol spray, like for your office employees to
Yeah. When everyone was trying to figure it out. Yeah.
Brandon Hernandez 14:57
Yeah. So it was just sitting down like, no, you're don't overthink it. Don't overdo it. A virus is still a virus. And its respiratory transmission is what it looks like to this point. So here's the things you can do in your office, here's the things that we would discuss. But then, but after probably April May-ish, there was a real heavy pivot for me personally, in just co-packing and manufacturing in general. I would say that I've got one tomorrow, I'm going to do an education event for co-packing. So that pivot happened relatively shortly the the first 60 days were very food safety, sec centric. Ever since it's kind of pivoted to pivoted to co-packing.
That makes a lot of sense. I mean, I think a lot of people are ramping up. I mean, I'm seeing a lot of people go into this business. Want to finally start that food dream. And of course, I work with people very early on. And you work with people probably a little later stage, which I want to talk about. But nevertheless, everybody's sort of like, oh, there's opportunity in the food industry. Foods not going away, we still need to eat. And in fact, it's shifted into more consumables, right? Like packaged goods. So everybody's wanting to ramp up production or, or go into production. I'm, I'm assuming on your side.
Brandon Hernandez 16:22
Yeah, the, there's no, I mean, listen, even in the best environment, launching any business, but certainly a landscape as competitive as the food industry is always a, it's never going to be easy. So whether it's the middle of a pandemic, I mean, everybody, nobody gets out of small business without scars. There's just no, that's what I tell everybody that goes to get into any small business. But you know, you sooner or later, those scars will start to they won't define you, they'll just define your journey. And it's something that you can point to like, like, Oh, shit, look, I survived that. Or, hey, I really did, I really did put my head down and make it through that. And I think that those scars become important. And certainly, you know, this is one of those times in history where you can point back to, especially if you I don't wanna say if you make it anybody that tries, I believe has made it. But I think if your business survives for 2, 3, 4 years past this, that's something you can point to like. Look, I, I do have the salt to do this. Because look what I did in the middle of the pandemic, right? You hope you hope it
Badge of honor.
Brandon Hernandez 17:37
Yeah, you hope that the cream rises to the top. And, you know, that's ultimately what any of us can hope for is just to be in it long enough to, to say I did it and you know, and be successful at it. And I would encourage anybody on this podcast or anything else, one thing that I'm talking to people about a lot because there's been a big pivot in the equity market, the private equity market and things like that. Don't define success by the six or seven figure paycheck, there is or check at the end of the rainbow. There is absolutely nothing wrong with building a lifestyle business. And if you can make 70, 80, 110, $125,000 a year with a lifestyle business- a quote unquote lifestyle business- that's okay too. And don't be afraid of that outcome. Now, building your business one way or the other is very different. The mechanics are different. But I just I run into so many, especially younger people and I know you know this that I'm going to do this and I'm going to get a you know, McCormick's gonna buy me for $750 million in 10 years and or five years and it's like, you know, it's okay just to have a business that you answer to yourself, right? Like, that's okay.
Yeah, that's super interesting because a lot of I mean, I know we run in the same circles to some extent and so I definitely hear that when you know I go to Naturally Boulder and things are like people are looking for that exit strategy and the buyout and I don't know I'm not gonna say they're getting into it for the wrong reasons, but it is a reason. But it's not the only reason to start a food business. But honestly my people and especially people listening this podcast I think are they're there and you say 125,000 and they're like falling over like oh my gosh, like I made you know, 40,000 gross last year at the farmers market. So I love that they're, you know, that is it is possible for sure, to have a lifestyle business that does pay you a nice salary and is very, you can live on that for sure. Most people can.
There's some people I know that launched a they call it a lifestyle business, but realistically it'd be just became their it became their vacation money every year. That's my vacation and Christmas money.
Brandon Hernandez 20:05
There's there's nothing wrong with that. That's great you if if you have the terms and the means at the store level to stay on or you know you do the farmers market every other week or every week, and it provides for your kids' college education, and that's really what you were after to begin with.
And you love doing it right?
Brandon Hernandez 20:23
And those are okay outcome absolutely nothing wrong with them.
Well, I want to talk, I want to wrap up at the end with a little bit more about where you see the food industry going. But I want to talk about the the nitty gritty, a little bit of food safety. The more clients and people I work with in Food Business Success, the more I'm realizing people skim over this, they. And it's, it's a little bit terrifying. And I try not to, you know, really get on people too much about it, because I understand why. But this is an area where when people and you know, my audience it's like, it's people who are starting a cottage food business, or they're moving the cottage food business into wholesale, like they're just starting out at farmer's markets. They're working in a commissary kitchen, maybe they're doing co-packing, but in a very, you know, they're getting 500 units at a time. So very small scale. But I'm finding people really skip over a lot, or if not all, food safety requirements. So do you have a kind of a general food safety statement you want to say? And then we can talk about maybe a couple of buckets that people because it can get so overwhelming. I mean, I know you can start talking and you're gonna throw out all these acronyms. And I mean, there's the flowchart is huge, depending on your product and all of that kind of thing. But yeah, food safety. What do you have to say on that?
Brandon Hernandez 22:03
Well, I would say that, you know, the cottage laws are good from the perspective that they provide a brand, a lot of protections to be able to get into business. What I will say is, nothing pisses me off more than when I come across somebody and they say, well, I don't, I shouldn't have to do it that way. I shouldn't have to do this this way. And it's like, well, I hate to break it to you but it's like anything else, ignorance of the law is no excuse. I have this conversation, even with COVID as a COVID application, you know, viruses, bacteria, you know, pathogens of concern. They don't care whether you believe in them or not. They don't care whether you believe they exist in your plant. They don't care whether they whether you want to acknowledge their presence or not. They are part of the math and what I something I always encourage somebody to do when they're scaling, it's like look, hacer plans are great, you know, EMP, environmental monitoring programs are great. I'm always a proponent, I'm never going to micro test my way to food safety. So I want to have a good GMP production environment and a way to produce food that the I always say the I want microbiological testing to be the validation that I did everything right. Not the validation that I did nothing wrong. And the differentiation to me in that is that I know plenty of shitty producers that allow things to go on in their facilities that I would never allow to go on. Nobody should allow it to go on in any facility. Yet their first answer is what my microbiological is are fine. I, you know, I tested a composite or I took beginning, middle and end and it's like, no, that's not if that's what you're, you're resting your laurels on then get out of the food business, because I don't need you in it. You know, so for me, it's always the education aspect of food safety is, especially when you start to mine the FDA website for you know, small business food startup literature or the USDA website, you know. There you know, the FDA has a good, small small food manufacturing startup guide. I think it's like two 300 pages long, but it's got a bunch of stuff in it. You might
Some light reading.
Brandon Hernandez 24:27
Yeah, I mean, it's not all technical jargon. It's actually really, it's brought to it's brought to a level of expectation that look, if you're going to be a small, small manufacturer, these are things that you need to know. You know, universities, you know, universityn of Nebraska, CSU to a certain extent their extension offices. There's all this free information floating out in the world. So, you know, I'm always I'm always reticent to take somebody who's you know, well, I didn't have time or I didn't have I just said, I don't think I should I don't think I should have to. Well, guess what? State governments, local governments, the FDA, the US, they could don't care whether you thought you needed to do it or should do it or, and small business exemption only goes so far like they. So something I always encourage everybody at least get a base level knowledge of what it is you're getting into and what the expectations will be. Because whether it's FDA or a government agency, or right now, there's a huge pivot in the retail side of the business from Kroger and Trader Joe's and Amazon to get on their platform where they're pivoting hard into foodsafe.
Oh, yeah, with COVID, there's more of a consumer expectation and we want more validation.
Brandon Hernandez 25:54
Correct. Yeah. And so there's this pivot just industry wide that you know that it's going to become more of a problem, not less of a problem and FISMA, whether you agree with FISMA, or not it or aspects or not to it, it's given teeth to those entities to be able to force you to do it to say, well, look, it's not just me. It's your government telling you, you got to do it. So I just encourage everybody to get a base knowledge. There's people like you, there's people like me, that's easy. I just call it phone a friend, how do I do it like, that's, that's easy. But something I always encourage brands to do, especially as they start to scale, or if they have any sort of volume at all where they they are pushing outside the boundaries of the state that they manufacturer in, right? I'm in FDA land, because now I've got Amazon or whatever. I always encourage everybody take one week's worth of your production data. Sit down, figure out how many, how many individual retail packs you made. And then I want you to sit down and I want you to count the servings per retail pack. And I want you to do that math out and see how many people you could potentially affect in a week. Now you know the depth of your responsibility. Now it's not it's easy for me to look at somebody at a farmers market and in an individual basis, hand one unit out, and not have it mean a lot to me. Mentally, it means a lot to me from a dollars and cents perspective, but from a food safety perspective, like well, they're going to take it home, they're going to consume it tomorrow. When you get to elongated shelf life and you know quality food safety aspects that go into hermetically sealed containment, things like that, you know, I always encourage everybody, when you when you go from the 50 to 100 people you may see at a farmers market or sell to, to 100,000 right? The weight of that responsibility has to start to become real to you. And if it doesn't, then then I have a different issue with you and it has nothing to do with food safety.
This is a little bit of a come to Jesus conversation. But it's one that I feel like I wish I could have with every client. So we're just doing it with the podcast instead. But it is such an important topic. And it's only going to get more important with COVID. Customers want to know, stores want to know. I mean, we just I'm working on a Whole Foods, we're putting a new client into Whole Foods and they have a whole new food safety platform. So it's, it's a big effing deal. And I just really want people to take it seriously. And I know it's so I think that's such a powerful exercise to think about how many people are putting this in their mouth and their bodies, feeding it to their kids like, like, there's a huge responsibility going into this. And, you know, I always kind of use the example of like, if you want to start a scarf business, like you can knit a bunch of scarves and be selling those tomorrow on Amazon or at the farmers market. But there's a lot more to a food business. And you have to be willing to yes, you're excited about making the product and putting a label on it and, you know, going to the farmers market, but there you have to be willing to do the food safety pieces and the financial pieces and the foundations and you know, just make sure you're legitimate. Like you have a responsibility to the public.
Brandon Hernandez 29:27
Yeah, absolutely. 100% there's no I mean, I always saw anybody that used to work for me at the facility level, right, I would just every time there was a food safety issue I made that I made the math real simple, whether it was the hourly tech on the line, or one of my one of my assistant managers or whatever, I would just, it would come down to the question, would you take it home and feed it to your kid? Would you take this, would you take this item home and feed it to your child? Not mine, not the person standing next to yours? And if the answer was no, then we knew what the answer was.
That's interesting, though, because I bet you know, I'm thinking of some producers that make fairly non-potentially hazardous food, you know, they make breads or granolas, or baking mixes, and and they're doing it out of a commercial kitchen. And, and so they're like, yeah, yeah, I would totally feed this to my kid. But then you also have the layers of like, okay, well, are you doing any traceability? Do you have a recall plan? Do you have a GMP are a HACEP plan? And they look at me like, Well, no, like, why do I need that I'm too small, or, you know, so they feel like their product is safe, but they're not necessarily following all the right. doing the big, the big food safety stuff.
Brandon Hernandez 30:53
Well, and I would say, from a, even from a, you want to save pennies in your business, you wanna you want to save dollars and cents in your business. So I've gotten some reduction in, in liability insurance for the brand. And if you don't have that, then you got a bigger problem. But, you know, I've gotten insurance reductions simply by having those procedures and processes in place, and providing that information to the insurer and got reduction on premiums and things like that, because I did have them. So you know, not having a recall and traceability and not having those things when you're at the commercial kitchen level. Is it ideal? No. Having no traceability at all, which includes your primary packaging, so anything that touches the food, again, as you get into Sprouts, and Kroger and Whole Foods, and Amazon, these are all expectations that are going to be had. I mean, even the the Amazon Go platform, which is for the newer brands or the smaller emerging brands, even when they come to do a food safety check your facility even though it's not under Amazon pantry, anything like that. Recall recall procedure and traceability there is a checkbox for it. Yeah, there you have it, or does it exist? Or doesn't it? And if it doesn't, they're gonna come back until you are going to have it. So you might as well do it now and get it over with.
And that'd be my answer for sure. It's like, yeah, you know, is the, is the FDA gonna come beating down your door? Or the state or even the county? Like, no. Probably not. Unlikely. But it's such a good like, you're going to have to have this if you scale. And why wait until you finally land that big distribution contract. And then you're scrambling to be like, that's when you call me. They call me or they call you. And they're like, Oh my gosh Sari, I need a traceability plan. And I I need a recall plan. And what is this? You know, I mean, I have people are like, what's this H double A CP thing. And you might as well like, again, these are the hats of the business they that you are responsible for. And food safety is one of them. And so let's get in the habit of doing full traceability from the incoming product and packaging all the way through to when it leaves your facility and knowing where it goes.
Brandon Hernandez 33:21
Well, and I think the the bigger thing is that, to go back to just the farmers market example, for a second, it's when you when you opt to let's just think of it as a social contract. When you opt to pivot from the farmers market into larger scale production, whether it's regional to three states or nationwide, you have it you as the business owner have elected to put all those hats on. And so recognizing whether you're wearing that hat or not is inconsequential, you are. You you've stepped into that and you need to be able to take the responsibilities across the board because again, you know, the phone call to somebody like you or me when you're making that pivot should be how do I maximize my sale? And my turns? And how do I make sure my financials are set up appropriately? And how do I you know, getting it produced. I got I've got that. You want that to be the secondary concern because once you make that pivot, you have to be able to maintain not only maintain the business as it is but prepare yourself for growth because even if you only got only and I'm saying that in air quotes for everybody, if you only got one region a whole foods and all of a sudden that takes off and whatever category and they open up all of Whole Foods national there's a different, there is a wholly different set of problems. And you don't want my traceability, recall, you know, HAACP plans, things like that. I don't need that to be my barrier to entry to be going nationwide, because I have a whole new set of headaches that I need to be focused on, and they're more financial. But if I haven't worked the mechanics out, and I'm talking to somebody like you, and I'm trying to walk, chew gum juggle, because I've ignored all these other things, because I didn't think they applied to me, quote unquote, yet, that that reality starts to hit your real quick.
Yeah, you don't want to be dealing with that all at once. And it can get very expensive, like better to make that part of your overall business strategy to be, you know, incorporating that and adding those pieces. And so I have a whole section in Food Business Success on food safety. And sometimes people do need to, depending on their product obviously, they need FDA, everybody needs FDA registration, but through the process authority, and, you know, so product dependent, but there's a lot to it. And I just think people just really underestimate or really try to put their head in the sand for safety. So hopefully, we have put a little fear of God in here that like, especially if you're looking to grow a big business. And that's your yeah, if you're trying to get to that lifestyle business where this is your salary, like these are part of being in business and being an entrepreneur and, and I love that the social contract.
Unknown Speaker 36:22
Yeah, and to scary the other half that maybe don't take it as seriously the I do due diligence for private equity firms. And the number one request that I have now in diligence over the last at least year pre COVID. By pre pre dated COVID. By COVID, by six to eight months is I want you to go and I want you to tear down their quality program. Okay. You got it.
Wow. That's crazy. I mean, it just seems so much smarter to work in services. I mean, at the beginning, you know, I'm not at the level where you are where like, you will put together a full HAACP plans. I don't I don't do that for people. But I do give them traceability templates and some recall, you know, I can give them the fundamentals to get going. And then I recommend when they scale up to go with somebody like yourself or your team that can really put together those comprehensive pieces. But it's like, you might as well do that now. And then if especially if that is your goal, your long term goal so that it's like then when you're doing due diligence, you're like, Oh, yeah, they already did that, like, I know it's good.
Brandon Hernandez 37:33
Well, I'm always more I think from a private equity standpoint, not that I would not stand on that soapbox too long. But I will say from a private equity standpoint, when I go to due diligence for somebody, and they want me to tear apart the QA, I'm a lot more forgiving when people have at least made the attempt, then, for people that have ignored it entirely. And I was like, You wait a minute, you're a $50 million a year business and you don't have a QA protocol anywhere in house? Like, what have you been doing? Right? And then you go and talk to some of their manufacturing partners. And you're like, Well, wait a minute how, like, you're letting them do that? Well, they said it was okay. Oh, all right. Like so, again, I would just I would encourage everybody it's a it's a lot more forgiving world out there if if you start down that path, you got you got to at least make an attempt at it.
Yeah, this is important piece to recognize that you need to set aside some investment dollars. This is part of running a business. So we probably beaten that horse to death hopefully, maybe not. But we go on and on. But what have you seen in manufacturing world? Like is it getting really tough to get into if I'm a new brand and I can scale up and I'm ready to go into manufacturing?
Brandon Hernandez 38:59
So right now the landscapes a little bit tougher just because everybody the the supply chain is is recovering from the whiplash of all the buyout from pretty early from early pandemic. But it is easing. I will say MOQ's minimum order quantities at the sites are probably the bigger hurdle right now than say cost. So people that are pivoting into manufacturing have to go into it with the eye that they may shoulder more financial responsibility from just an inventory aspect than what they had anticipated. I do know a couple new manufacturers that are coming online. I know there were we've had three, probably four, yeah, four manufacturers, quote unquote manufacturers that we're doing a lot of It's actually been amazing to see the pivot that, you know, like a catering service or some of those businesses that that only that only worked with one category making these pivots relatively quickly into USDA manufacturing or,
Yeah I'm seeing that too. Like people restaurants, yeah, restaurants caterers wanting to bottle their sauce or, or those kind of things. Yeah.
Unknown Speaker 40:26
And they're and they're making the pivot quickly, but even just coating them launching themselves as co-packers?
Oh, sure. Yeah.
Brandon Hernandez 40:34
Putting in the time, effort, energy money, like, you know, at the drop of a hat, they they're making that pivot. So, we have seen some new assets come online, that I think, depending on the category, obviously, are going to help and then everybody else is, I always just tell everybody, the you know, the really good manufacturers are probably are probably full and will be for a while and you know, after that is just kind of varying levels of shitty depending on who you're working with. So why why your manufacturing vetting process is important. And, you know, I always tell everybody, it's not speed dating it's getting married. And so you got to spend time with your manufacturer, that you're gonna be able to go make a visit, maybe to if they're open to it. I know, COVID is a little bit difficult. But there are still manufacturers that say, if you follow this protocol, you can come on site. But you have to view it, you have to look at it that way. The number one reason we get asked to step in step into existing scenarios is because the relationship is devolved to the point that they don't even hardly even talk to each other anymore. And so that's
Brandon Hernandez 41:06
You're the divorce attorney. The mediator.
Brandon Hernandez 41:48
Yeah, exactly. So keeping an open open line of communication and and just I think that that's probably the bigger, the bigger thing right now. You can find manufacturing still, you know, you just got to be careful who you're who you're who you're planning to marry or date. That's the that's the bigger thing right now.
Yeah, absolutely. I mean, I would love to see more restaurants, you know, pivot to be those commercial kitchens, or open up that space to cloud, you know, for cloud kitchens and, and commissary and things like that. So I think that's a great opportunity for the restaurants that can hang on, to maybe look at that, because we we definitely need more commissary kitchen space, at least in my opinion. And manufacturing.
Brandon Hernandez 42:40
Commissary kitchen space, and realistically, for restaurants who generally operate on razor thin margins anyways, processing CPG products with with a with a decent margin on it is just a nice bolt on business. I mean, I know a couple of restaurants that have made the pivot and said, even when all this is over, we're probably going to continue to process on on the least a small scale, because the margins are there to support having the business. It's taught. It's not a whole category of people that, you know, that didn't think about doing it, but now have have dipped their toe in it. They're, they're excited about it. And that's and that's always a good thing to see.
Yeah, I love that. Yeah, I have a client who were having trouble sourcing some plastic lids. So I definitely we're, you know, certainly in the plastics and even some of the glass we're seeing some packaging shortages right now. But and some ingredients as well. But are you seeing are you seeing a lot of that or you feel like it's gonna start catching up pretty soon?
Brandon Hernandez 43:43
Um, I think the bigger thing is what's going to happen with I mean, packaging in general has always been a bit of a rat race, depending on for costs and things like that. But I would say aluminum cans, aluminum in general, still, probably gives me a little bit of heartburn. It'll catch up. It's just, it will catch up. It's what it's gonna cost for it to catch up, I guess is the best way I can put it. Yeah. You know, glass and you know, glass to a certain extent. I know a couple of new manufacturing sites that went into Mexico that I think will help alleviate a lot of the stress and strain that we saw from, you know, the pissing match with China. But you know, I think glass and plastic are going to recover quicker. Aluminum is going to be the one I think that cans and things like that are going to be the head scratchers for people for at least a little bit longer.
Hmm. Interesting, which and what you know, typically, consumers I think, something that's in a can and aluminum we also want to pay pretty low dollar amount for so it's not a good good match. Okay, well, let's talk about, you talked about some pivots already. What else are you seeing in in COVID? I mean, I think that there is real, do you actually backup? Do you feel like there's opportunity for small brands to step in during COVID? And, and continue on successfully? As I think that COVID has rocked a little bit of the supply chain, the manufacturing chain? Do you see places and opportunities for new brands to come in?
Brandon Hernandez 45:36
Well, so discovery is always a big part of any being any brand. I don't care what size you are. Discovery and new product discovery is always tough. I would say that from a from a small brand perspective, looking into, you know, incubators that are cropping up everywhere, snackcellarator in California, you know, CPG DFW out of Dallas or CPG, whatever, and whatever town, NYC. You know, there's a lot of incubators and accelerators, Naturally Austin, you know, they're doing a lot of pivoting towards packaging small brands for discovery and then shipping them out into the world for you. Startup CP startup CPG is another one where you can ship product in and they and they help with discovery. Anybody, I don't care how big you are, right now, if you have the dollars to allocate, if you do not have a direct to consumer play, now is the time to do it. Because what was generally speaking a 6 to 9% of your business direct to consumer versus brick and mortar, what was 6 to 9%, pre COVID, it right, immediately jumped overnight to 60, 65 to 70%. And realistically, the prevailing wisdom right now is that once that calms back down, you're probably looking at it's settling at 25 to 35%. So anybody without a strong D to C play, really needs to think about making that play. If I'm a new brand, and I'm advising a new brand, or you know, I'm saying build your D, D to C marketplace and go get hooked up with one of these, again, a Naturally Austin, startups CPG. Somebody that can help me put helped me with discovery. And then let's go get this. I think there is opportunity. Now, it's category specific. But realistically, I think there is still opportunity. I think there is still whitespace that people can attack. You just got to be real smart about that play right now. Because whatever you set up now is going to be your blueprint blueprint for the future. And the one thing that COVID exacerbated beyond health, healthcare strains and potential supply chain, what was slowly pivoting to direct to consumer plays overnight became the solution for a lot of people and the people that didn't have that setup were left out in the cold. And so I think any part of brand architecture moving forward has to include, how are we going to do D to C? And how fast are we going to be able to do it as a brand?
Yeah, absolutely. I mean, people are scrambling to get on Amazon or get their, their websites up and running or better, better running and get those systems into place. So if you already had those in place, you definitely think people saw a real boom, right at the beginning there. But we're training people, I think we're training customers to very quickly shift to purchasing online and purchasing and direct to consumer models, where they were maybe more hesitant to do so before, especially in food.
Brandon Hernandez 48:57
Correct? Yeah, I would agree.
All right. Well, I'm gonna wrap this up by asking you the question around and we've talked about this already a little bit. But I'd love especially if you have an example or two that you might be willing to share with us of how you feel like things are going to change for the better as we come to whatever is the instead of a new normal, a better normal. So do you have any specific thoughts or examples on how you think COVID is going to change us for the better in the food industry?
Brandon Hernandez 49:33
So from a food industry, we touched on it previously, just a little bit, which was the direct to consumer play. I'm not gonna say I advocate one way or the other, whether it's good or bad. I will say from a brand perspective, the DTC play is more beneficial. There's higher margin points, there's higher value in that in in that you're not paying the distribution margin, you're not paying the retail margin. So those are margin points that you can effectively put towards your business or put in your pocket depending on how you look at it or so, I think from that perspective, it's really leveled the playing field from a small brand versus a big brand where you're not getting dominated for shelf space. And you're able to pivot and you're able to come up with new and exciting, brand new and exciting flavors, kind of on the fly. I know, one of our one of my clients, Hop T, you know, they've used this opportunity, because they had some DTC infrastructure, and they, they've used this opportunity, you know, once COVID, COVID hit, they started making, you know, specialty flavors. That and they, and boom, they they started making specialty flavors, they added direct to consumer backbone, they really went after it. And you know, it's been good for them. And it was a smart, it was a smart pivot, you know, Dean and Andrew really, really thought that was a great idea. And it was and they they made that pivot, and they, they continue to have success based on that. And then, you know, the other piece, and it's more, I think it's more for not the prepared meal kits, but certainly, you know, the, the baking industry. Everybody knows how to make a piece of bread now. But I think just the, the pivot towards an entire generation of people that were so locked into the rat race, and you know, work and work and work and play, play a day and work and work and work, my hope would be that they've the opportunity to interact in such a higher level or more frequent level with your kids, you know, as kind of hopefully brought a generation of people back to baking and cooking in the home. Now, I'm a big restaurant guy, I love restaurants that don't, so I'm not saying I would ever want any of them to go away, that's certainly not the case. But hopefully, those stealing those moments of just that interaction level, it my hope would be that that, you know, the people don't lose that sort of as we move into a post COVID world that, you know, there's an entire generation of people coming after us, mainly in our children that, you know, hopefully you teach them to get excited about something other than, you know, something other than being an astronaut or a, you know, you know, professional athlete or anything like that. I mean, there's a whole wide world of things that they can do and so, but more just that interaction at a personal level with your kids. My hope is that that's something that everybody takes away with them.
Yeah, that's great. And I I'm hoping you're among them. I mean, you traveled a lot. And now you're home with your kids. And
Unknown Speaker 53:02
Yep! Driving them nuts every day. Oh, man, every day that like Dad, dad, my homeworks all done, I gotta leave me alone. All right.
Are you baking baking muffins with them?
Brandon Hernandez 53:15
I am not the baker in the family, I can barely make a lopsided cake with a free move from like, Duncan Hines box. So I I sit back and I will help them with other things like we've made, you know, homemade fries, or I've taught my son how to cook steaks or you know, there's, so there's some different, there's some different interactions that I can have. I am not the baker, I will readily admit anything I bake, you don't want to eat, so it's fine.
What size company typically starts to engage your services? I guess maybe as far as sales, that's the best way to judge it. But when do people typically come in to start working with Whole Brain?
Unknown Speaker 53:59
I mean, realistically, if I had to put a number to it, probably a million plus a year in sales, if they're going to come, you know. It really depends on what they're after. I mean, we're an a la cart service. So I mean, if you're just after high level, it's gonna be a couple hours, sometimes we can fit in that window. But realistically, you know, a million plus in there, you know, we, we, but again, everybody's problem is different, right? One to One to 20, 25 is one set of problems. 25 to 100 is another set of problems. So it really just it's dependent upon, it's dependent upon the the need of the client and certainly if, if it's something generally speaking pretty good anymore about knowing what it's going to be and I'll be like, look, before you come to me, go talk to somebody like Sari because you need to set all these things up. And I know she knows how to do it. So go have her do it.
Right. It's a lot more expensive.
Unknown Speaker 55:00
Because it's not. Yeah, so it's like, let Sari do it because I know she has, she has her shit together. So let's just let's let her do it and then and then you know, we collaborate at that point to a certain extent. So, but that's essentially our strike zone ish. Yeah.
Okay. And if people want to look you up or connect with you, you're on LinkedIn at Brandon Hernandez. Right?
Brandon Hernandez 55:33
And then also Whole Brain has a LinkedIn profile, right?
Brandon Hernandez 55:38
Whole Brains got a LinkedIn, they've got an Instagram, amazingly enough. I think we've had more people reach out over Instagram than LinkedIn, which was interesting. Like, okay, sure. But no, there's a there's a lot of good resources. There's a lot of different ways to find me. Naturally Boulder's website, Whole Brain's website. You know, there's a Yeah, there's always ways to find me. And certainly, if, if they need to, they could always reach out to you and you know how to get ahold of me. And even if it's just a high level, ask and you know, I've always never had a problem to help.
Yeah, well, if you if you do reach out to Brandon, make sure you tell him you heard this onFood Business Auccess podcast, and he might be extra extra nice to you.
Brandon Hernandez 56:27
I'm always extra nice. Why. Don't just tell me that you hate just whatever you do, don't start the conversation with I really don't believe in QA and I don't know why I have to do it. That's a good way to get on my good side.
I love it. All right, Brandon. Well, thank you so much for your time. I know what you charge an hour. So we all really appreciate it.
Brandon Hernandez 56:53
Thank you. I say I appreciate you having me. And, you know, I appreciate our continued continued relationship, which has been great. And, you know, I look forward to I look forward to the day that we can actually go out and see each other in the wild blue yonder again.
Yeah, go have a coffee or cocktail again. I look forward to that. Next time you're in Denver, and there's a place open.
Brandon Hernandez 57:18
No problem. Take care.
Wow, I hope you guys got so much out of that. You can see why Brandon is one of my go to people and just a great guy all around. He always gives it to us straight so be prepared for you know, truth talk if you decide to reach out to Brandon and do make sure you let him know you found him through Food Business Success and he will definitely take really good care of you. So that's it for today. And until next time, I hope you have an amazing week. Are you ready to start that delicious idea that you make in your home kitchen, or grow your existing packaged food business and take it to the next level? The most successful food business entrepreneurs have support, guidance, focus and accountability to help them make it happen quickly without wasting time or money. Plus, I think starting your package food business should actually be fun. Food Business Success is your secret ingredient to creating your food business dream. Please don't go this alone. Check out the private free Food Business Success Facebook group to connect with other foodprenuers, get your questions answered quickly, share your wins and receive special training and tools I only share inside the private community. Just search for Food Business Success on Facebook, or get the link in the show notes. curious about how Food Business Success can help you head over to FoodBizSuccess.com and fill out the application to see if you're a great fit for the program. Together let's make your food business dream a reality.