The Modern Retail Podcast

Win Brands Group has been around since 2017, but this is the year the DTC roll-up strategy is really beginning to gain steam.The company owns a slew of online businesses, including the candle company Homesick and the weighted blanket brand Gravity. According to founder Kyle Widrick, things have been building nicely since inception, but thanks to big pandemic-related changes Win is now set up for more growth.“We’ve built up our holding company and our structure and our process in such a way that we plan to do a third vertical and a fourth and a fifth,” he said on the Modern Retail Podcast. “And this will continue for a decade-plus to come.”Most recently, this week, Win announced that it raised $40 million and acquired a new company to its portfolio: a hat brand called Love Your Melon. On the program, Widrick spoke about his ambitions for LYM, as well as the crossroads many founders of growing online brands face.“It was clear they were going to have to hire a tremendous amount of more people to get to success on Amazon and at retail,” said Widrick. “So the question becomes: Do you want to build that yourself and hire those folks yourself? Or do you want to partner with someone like Win?”Another big topic in the e-commerce space is the rise of roll-up companies. Though Win has been around for a while, other firms -- many of which like Thrasio and Perch are focusing on marketplaces like Amazon -- are continuing to grow and amass large amounts of venture capital funding. According to Widrick, his company and the others are different for a variety of reasons. One of the big ones being branding: Win Brands Group looks to acquire companies with a notable brand, while many other roll-ups are looking for fast-selling SKUs.Ultimately, said Widrick, that leads to the ultimate ambition he has for his company. “We’re partnering with great founders and making bets on great brands that we plan to be around for the next 20 years-plus,” he said. “These are not flash in the pan -- in and out -- these are long-state businesses that we’re betting on for the long term.”

The non-alcoholic drink, which launched in 2020, tastes similar to a European apéritif. And, according to founder and CEO Mélanie Masarin, there’s growing demand. She joined the Modern Retail Podcast this week and spoke about Ghia’s journey thus far.One of Ghia’s big markers is its branding. Ghia is available in the U.S. in both cans and bottles, and has a very retro eye-catching look. This was all by design. “I really wanted Ghia to not be another pastel-colored millennial brand,” Masarin said. Instead, she focused on the looks and feels of more analog iconography, like old restaurants. “We had to be unapologetically loud and fun.”This look has helped the company grow. It launched at the beginning of the pandemic, and was initially sold only online. But even so, Ghia was able to grow. Sales, Masarin said, have nearly tripled year-over-year. Now the focus is on getting more people aware of the drink. Some of that may include a foray into more physical retail stores and restaurants, she said, but that also comes with its own costs.“Everything is more expensive,” she said. “We are just being really thoughtful and trying to basically build redundancies with every single vendor that we can.”What’s more, she’s confident that there will be continued interest in non-alcoholic spirits. “This is not just wishful thinking,” Masarin said. “I do believe there’s a shift.”

The leap from Richard Branson to crypto isn’t that big, as it turns out.For venture capitalist Mags Kala, all it required was quitting her day job. Kala used to work at Bain Capital, helping out big brand names like Shea Moisture and Virgin Voyages. But one day she decided to leave it all behind and strike it out on her own. After about a year of going solo, she’s become especially keen on the Web3 space.On this week’s episode of the Modern Retail Podcast, Kala explained how and why she made the jump.For her, as a consumer investor, she wanted to be on the ground floor of the biggest changes in regards to how regular people spend their time and money. That’s what initially turned Kala on to the world for crypto.What was it that made it click? According to Kala, an expensive digital avatar of an ape. “Joining the Bored Ape NFT craze was very eye-opening for me,” Kala said. Here, she was describing the company Bored Ape Yacht Club, which auctions off pixelated pictures of apes using blockchain-based contracts and cryptocurrency. While it’s a phenomenon mostly for people online (with a lot of money to spare), Kala said the rise of these NFT artists made clear many other things as well.At its core, these types of new programs hit at a base-line question she’s always trying to answer as a consumer investor, Kala said: “What’s truly next for the consumer economy?”

Energy drinks are in the midst of a renaissance.According to Fabiola Torres, CMO and svp of PepsiCo’s energy drinks category -- which includes big brands like Rockstar -- the renaissance is about finding who the core customer is. Her focus, she said on the Modern Retail Podcast is to “really go deep into storytelling, making sure that our products continue to get better and better.”Torres joined the PepsiCo team in April 2020, right when the pandemic hit. Before, she worked at high-end brands like Beats By Dre and Nike.In her eyes, she was excited about leading the marketing for a ubiquitous product that still resonated with unique subcultures. That’s no easy task, however. Energy drinks have a bunch of connotations, and their popularity has risen and fallen like changing tides. But as gaming platforms continue to reach new users, and with Gen Z being such a driving force of culture, energy drinks are making a comeback. According to July data from IRI, the energy drink category grew 11.6% year-over-year.PepsiCo’s strategy with Rockstar, which it acquired in 2020, is to team up with people and events that are popular in the communities it wants to target. This includes teaming up with Microsoft on its latest Halo release, as well as a bunch of influencer campaigns. That’s especially true for social campaigns; “When we talk about TikTok, it works with influencers that have the reach,” she said.The hope is to find the gaming, youthful zeitgeist while also figuring out areas for growth. What’s more, according to Torres, Rockstar is just the beginning of energy drinks under Pepsi. “The future is bright for us,” she said.

Another year has come and gone, and big changes came to the retail industry.Giants like Shopify and Amazon grew even bigger, while older retail models like department stores suffered. Meanwhile, online brands saw big growth but faced their own unique set of headwinds. And newcomers, like fast fashion mobile app Shein, became more of an everyday staple.This week on the Modern Retail Podcast, we decided to take a look back and dive into some of the most important issues we wrote about over the last twelve months. Reporters Maile McCann and Saqib Shah as well as managing editor Anna Hensel all dove into the topics they thought drove 2021's retail narratives.These storylines give some insight into what’s ahead. Online strategies remain top of mind for companies both big and small. Meanwhile, people are discovering products in new ways.

Oats Overnight, a spoon-free, protein-based drinkable oatmeal, has been made in-house since the company began. Founder and CEO Brian Tate started Oats Overnight in 2016 out of his kitchen, and after about a year of formula development, began selling the bottled oats via the brand’s website.Part of the decision to vertically integrate production was due to difficulties Tate found in securing manufacturers for the product’s unique formula. “At a very, very early stage, we opted to do it [production] ourselves for the flexibility,” Tate said on the Modern Retail podcast.Fast forward five years, Oats Overnight has a growing customer base and new partnerships with Wegmans, Whole Foods and The Fresh Market. The brand tripled its active direct-to-consumer subscribers – from 10,000 to 42,000 – during 2021. This year, the company is up 150% in revenue year-over-year, hitting $25 million in sales in November.As a result, the company’s existing 20,000 square foot Arizona plant wasn’t cutting it. With that came the need to upgrade to a bigger oats-blending plant, said Tate.This year the company has grown to over 100 employees – including 40 on the production line – and is in the process of moving to a 50,000 square foot facility. But running a food plant isn’t as simple as it seems, and requires a lot of financial capital and labor to run smoothly, Tate explained.This conversation is part of Modern Retail’s Chain Reactions series, in which we explore the quick and long-term investments retail brands are making amid the supply chain woes.

As securing space on container ships gets more expensive, brands are coming up with creative ways to make sure their products take up less space.One such company is DTC luggage brand Paravel. Since launching in late 2016, the company has been working on ways to reduce its carbon footprint and optimize its freight routes. One reason for this is because the majority of Paravel’s products are made across Asia and in Italy -- two hubs that experienced delays during the pandemic. These delays prompted co-founders Indré Rockefeller and Andy Krantz to get creative with Paravel’s container packing methods.Instead of shipping empty suitcases, in the past year the company created a packing consolidation program for its manufacturing and loading crew. This process entails nesting Paravel suitcases and carry-on bags inside each other before being shipped to the U.S. While this requires a lot of coordination between manufacturers and offshore logistics, the results are worth the planning, co-founder and CEO Krantz said on the Modern Retail Podcast. This program is also influencing Paravel’s future product design and configurations. “There’s an element of innovation and spatial consideration that this process has introduced and made tangible for everyone on the team,” Krantz said. “From our production and product development folks, to our marketers, to our finance and operation teams.” This conversation is part of a series, called Chain Reactions, in which Modern Retail explores the quick and long-term investments brands are making to minimize their supply chain woes.

International manufacturing continues to create headaches for American brands. For card and board game maker Exploding Kittens, producing the majority of its products in China has had a domino effect on its overall distribution process. “We’ve had challenges for two years now,” Carly McGinnis, head of production, sales and logistics at Exploding Kittens, said on the Modern Retail Podcast. That’s mainly because “about 90 to 95% of all of our goods are produced in China,” she said.In 2020, Exploding Kittens’ initial challenges were not so much with production or freight coming out of China -- but more so with shuttered warehouses domestically. This year, like many others, Exploding Kittens’ logistics team is dealing with double the manufacturing timetables, as well as bottlenecks at California’s ports. The company has experimented with manufacturing in other places over the years. “We’ve produced things in Poland in the past, but China just offers efficiency, quality materials and speed to market like no other location worldwide for us,” said McGinnis. “So we’ve been tremendously reliant on China since the beginning of the company.” Still, the accumulating issues have led the company, which launched in 2009, to look for production facilities outside of China -- starting with Mexico and Poland. Furthermore, it’s exploring more trucking routes from alternative import ports, like Seattle, Washington. While these alternatives have their own downsides, McGinnis said it’s important to continue diversifying away from a rigid supply chain. This conversation is part of a series, called Chain Reactions, in which Modern Retail explores the quick and long-term fixes brands are making to minimize their supply chain woes.

If a boutique wants to carry products from handbag maker Scout, they are going to have to plan ahead. In mid-2020, Scout transitioned to a pre-book wholesale model, which entails giving retailers an opportunity to secure their orders “almost a year in advance,” founder Deb Waterman Johns said on the Modern Retail Podcast’s new series: Chain Reactions. Previously, Scout took retail orders on an as-needed basis and by estimating demand for their upcoming seasonal designs. “It’s a commitment on our part, as well as on their part,” she said of the upfront booking and payment transactions, Waterman Johns said.Wholesale retailers are a major part of the company’s business. Scout, which launched in 2004, and sells its handbags across roughly 50 stores, including local boutiques, gift shops and drugstores.This episode is the first in a series where Modern Retail explores the quick fixes brands are making as a result of the supply chain craziness experienced over the last year-plus. Chain Reactions will dig deep into short-term decisions that had longer-term effects. For Scout, its big change was to the way it handles orders.Waterman Johns said that because of the pandemic’s impact on these smaller accounts, Scout wanted to create a better system for wholesale orders. The shuttering and restructuring of many boutiques and gift shops -- where Scout sells its tote designs -- prompted Scout to want to better understand how it produces and distributes its inventory to wholesale partners, Waterman Johns said.For a business, selling out of products is usually a great thing. However, Waterman Johns said the company wanted to transition into a more efficient “newer normal,” in which Scout ensures its retail partners have access to the merchandise they want while the brand has better insight into its in-demand styles and patterns.  So far, the results have been positive, Waterman Johns said. With advanced pre-booking, Scout can also better communicate inventory volume to its overseas manufacturers. Whereas previously, the company was “guesstimating” its wholesale demand (and selling off excess to off-price retailers in later seasons), the new pre-book model has helped avoid over or underestimating demand.

Yelitsa Jean-Charles says she was able to grow her business by being authentic.Jean-Charles is the founder and CEO of Healthy Roots Dolls, which makes toys that represent more diverse backgrounds. “I never really had dolls that look like me growing up,” she said. So, she designed Healthy Roots’ first product, Zoe, which Jean-Charles described as “a little brown girl with kinky curly hair.”Zoe was first devised in 2014 as part of a school project. In 2018, Jean-Charles launched a Kickstarter that raised $50,000. Earlier this year, the company raised a $1 million seed round. And, this past October, Healthy Roots landed in over 1,200 Target locations. Jean-Charles joined the Modern Retail Podcast this week and talked about the company’s journey.Jean-Charles was able to grow the company by posting about her life and experiences. “I talk about loving yourself, I talk about hair, I post selfies, I post about my traction with my company,” she said, “I think it’s really authentic and it clicks with people.” In her eyes, that authenticity part is key. “I don’t think there’s any formula to going viral other than consistency and great content that speaks to a broad audience,” she said.Even so, virality presents a double-edge sword. “Going viral is terrible,” she said. “You run out of inventory, you don’t know when it’s going to be back.” Indeed, when a post of hers went viral earlier this year, Healthy Roots was already sold out of stock. She decided to use the moment as a way to gather preorders. While people waited for their dolls to get in stock, Healthy Roots provided updates. “We started doing Facebook Lives, Instagram lives, sending weekly updates,” Jean-Charles said. “We wrapped it around a narrative of Zoe coming back from a trip.” True, Zoe was at sea, but she wasn’t exactly sailing on a cruise boat -- more of a container ship.These touches are what have helped Healthy Roots grow. For now, it’s focused on one doll and its accessories. But Jean-Charles sees a bright future. “I think it would be a disservice to not explore every opportunity that presents itself to tell a story and connect with children,” she said.