The Modern Retail Podcast

Jonathan Wahl sees the boom in kitchenware companies as a good thing for the sector as a whole."Seeing others recognize the same opportunity reaffirms that yes, we're on the right track," Wahl, who co-founded the cookware company Abbio last year with his brother, said on the Modern Retail Podcast. "In terms of competing, I believe that at the end of the day the best products are going to win out."That last bit is worth saying because Wahl sees a proliferation of low quality products in the market."We're kind of still in what I'll call the 'Shopify effect,'" Wahl said. "It becomes very easy for brands with not very well considered, thought out products -- or inferior products -- to launch and try to establish some sort of market presence. I think that's happened in our space as it's happened in many others."Abbio only makes and sells five pieces of cookware, which as a set go for precisely $287.Wahl pointed to tremendous growth due to the coronavirus, in both sales and traffic to its site. "We were seeing consistent growth and were excited with our progress. Then came March, April, May and June. We boarded a little bit of a rocket ship," Wahl said. Half of its sales are direct-to-consumer, he added.

2020 hasn't been a good year to travel or go on vacation, and Americans are spending more on home improvements instead.Furniture brand Article was lucky enough to corner that market with a DTC model that eschews the need for expensive floorspace that has gone unused for several months this year."We saw this perfect storm for us, where not only were we effectively reaching a whole lot more people who were super motivated to buy, but we also had this really compelling offering for them, because the competitive landscape had shifted so radically," Article director of marketing Duncan Blair said on the Modern Retail Podcast.The advantages have proven big enough for Blair to doubt the need for a company store in the future, of which he questions the efficacy in 2020. "It's such a contrived environment. You walk into the stores, [there are] hundreds of other people, you're kind of sitting awkwardly on this sofa in the middle of the showroom with people looking at you and sort of waiting around. It's not your space," Blair said. "There may not be a good reason for us to go into retail anytime soon."Speaking about the big picture for the company and the sector, Blair said he was confident that "we'll continue to grow as a share of e-commerce, and that e-commerce will continue to grow as a share of the overall furniture market. The question mark is: What is going to happen in the total furniture market over the next 18 months to three years?"

Sam Dennigan launched Strong Roots with a single item -- sweet potato fries -- in Ireland in 2015.The frozen vegetables company has since raised $18.3 million from private equity firm Goode Partners to expand into the U.S., where Dennigan is now based. His experience on both sides of the Atlantic helps him highlight some of the competitive differences among markets."The key difference between the U.S. market and the U.K. and Irish market is the fact that private label is much stronger in natural foods in the U.K. and Ireland whereas brands lead the way with natural food in the U.S.," Dennigan said on the Modern Retail Podcast.The pandemic has proven to be a boon for staff productivity, he said, and has also forced the company to branch into making ready-to-eat dishes available for delivery."That was in response to not being able to sample in stores. That's something that's not going to come back for some time with the risks around cross-contamination and infection," he said about his collaboration with Ghost Truck Kitchen in Jersey City. "We've pivoted into being a food service offering that you can order direct to the home through Uber Eats and Seamless and Door Dash."

Back when GT Dave, founder of GT's Living Food, single-handedly proved that there was a market for kombucha in the U.S., "probiotic" was hardly a buzzword. "Fortunately today, that hurdle or barrier is no longer there," Dave said on the Modern Retail Podcast.Kombucha is big business; sales exceeded $480 million in 2019, according to Nielsen. GT's Living Foods, which was founded in 1995, makes for a big piece of that pie -- 60% of it back in 2015, as he then <a href="https://www.inc.com/magazine/201503/tom-foster/the-king-of-kombucha.html">told a profile writer</a>.He wouldn't provide an update to that figure for 2020, but did speak to the challenges presented by the pandemic, especially early on. "There was a time where anything that was considered single serve, like our 16-ounce bottle, was basically dead," Dave said about March and April.In-store sales have since rebounded, and the company is taking its first steps in the direct-to-consumer space. "This quasi-subscription approach is something our fans have been waiting for a very long time and Covid kind of gave us that reason to explore it."GT's other strategies for surviving the downturn include emphasizing the product's possible health benefits (or at least, its <a href="https://www.nytimes.com/2019/10/16/style/self-care/kombucha-benefits.html">healthful reputation</a>) and communicating with retailers about their common interests in keeping supply flowing.

Blueland CEO Sarah Paiji Yoo wants you to know that when you pay for cleaning supplies at the grocery stores, you're mostly buying water. "Oftentimes consumers are paying really for a new plastic bottle -- and water, which we already have at home," Paiji Yoo said on the Modern Retail Podcast, which was recorded live during our Modern Retail Virtual Summit this week.Blueland sells concentrated tablets for consumers to mix their cleaning supplies on their own. The relatively tiny packaging is another differentiator compared to what you see from Ajax and Dove."Existing CPG players were incentivized to have larger, bulkier packaging because this packaging really served as billboards in stores," Paiji Yoo said.Blueland goes the direct-to-consumer route, which Paiji Yoo considers to be the only route for products that depend on changing consumer behavior. Its appeal isn't just that it's a smaller, new kind of product; Blueland wants to eliminate single-use plastics. In the last two months it's expanded to the dishwasher and laundry categories (with a powder and tablets, respectively).The plastic films that keep your typical dishwashing pod together aren't all that good for the environment. "I think people think that because it dissolves that magically disappear. But unfortunately those plastic mulches enter our water systems," Paiji Yoo said.The pandemic has made consumers somewhat more likely to demote previous green concerns in exchange for effectiveness and availability, she said. But as a result of the crisis, she estimated, demand has been 4x what it would have been otherwise.

It took a trip to London for Emily Schildt to realize that American grocery stores could do better."I came back personally really yearning for a grocery store experience like I had there," she said on the Modern Retail Podcast. "They were just beautiful spaces in which to shop -- gorgeous products, but really thoughtful display and design."Last year Schildt founded Pop Up Grocer, a traveling showcase of a few hundred products that sets up in U.S. cities for a month at a time. It had four locations to date; the next one opens in Brooklyn this October.Many of the goods, like cauliflower crust, are available at grocery stores already, but Schildt argues that they're buried in a mass of other items. Since the 90s, the average grocery store's number of items has mushroomed from 7,000 to between 40,000 and 50,000, according to a recent book on the topic."It's a lot of cold outreach," she said about how she gets products that are worth the spotlight, many of which she finds on Instagram. A place at Pop Up Grocer helps show off brands that might otherwise remain obscure or have trouble selling online. "I think people find starting their own business so hard if they don't have all of the connections. And it's hard even if you do," Schildt said.Schildt talked about the company's move into ecommerce, plans to raise outside capital and her favorite place to shop for food in Paris.

Piggy banks aren't especially in vogue, but the idea behind them sticks. By saving up a little over the long haul, you can pool quite a bit of money — enough, in Reel's experience, to pay for a luxury handbag, furniture or some electronics.The personal finance app lets customers save up for specific items. Users pick something and commit to wiring Reel a few dollars a day for it, setting an enticing timeline into motion. Put aside $5 a day for 12 weeks, for instance, and Reel will take care of shipping you that Apple Watch you've had your eye on.It's a win-win situation, in CEO and co-founder Daniela Corrente's telling. Customers save responsibly for stuff that may have felt was outside their price range, and companies working with Reel create a new touchpoint for cost-concerned customers (the only loser might be credit card companies, which Corrente doesn't feel too bad about; she had her fair share of credit card debt in college)."Many of our customers have gotten their first luxury handbag through our website. So we're actually converting them and giving brands the opportunity to leverage our platform," Corrente said on the Modern Retail Podcast.The average customer, she added, has two or three "active reels" they're saving for.With the pandemic continuing to constrict people's social lives, purchases for fashion -- Reel's first vertical when it launched in 2016 -- have dipped. Meanwhile, the company accelerated its expansion to other categories. "Our priorities has humans have varied, because we're 24/7 at home now. A lot of us, we don't necessarily have a house that's fit to work from," Corrente said. "All of a sudden, [users are] investing more in making your house prettier, more accommodating for working from home, investing more in fitness from home... those have all been categories that have catapulted since this happened."

Closed spaces, mingling strangers and loud music to shout over -- bars seem purpose-built for spreading the coronavirus.According to Bacardi CMO John Burke, that means people will be doing their drinking, and less of it, at home."This summer there'll be a lot more drinking out of home because people feel much more comfortable social distancing at home," Burke said on the Modern Retail Podcast. "We predicted that trend back in early April, and we've switched to producing quite a lot of our brands into ready-to-drink packaging."The only bright spot in a recent report by IWSR is indeed in the ready-to-drink category (like last summer's hit, White Claw) which the market analyst estimates will grow by more than a fifth this year in the U.S.Alcohol's popularity was on a downward trajectory even before the pandemic, and globally may not return to pre-coronavirus levels until 2024, according to the report. The latest slump only sharpens, according to Burke, a trend that Bacardi is prepared for: "the desire to drink less spirits and seek lower alcohol or no alcohol solutions. That's a trend that we expect to see massively amplified."Given how that expectation combined with the pandemic, Bacardi expanded the launch of a zero alcohol aperitif under its Martini label. "Despite disruption in the industry we'll deliver ahead of target for this year on that innovation," Burke said.Another silver lining is the growth of e-commerce for Bacardi's spirits, starting from an "abnormally low level" compared to other sectors. "In the last three months we've probably seen two years' development take place," Burke said. "The number of people who've had their first ecomm experience of buying liquor online is huge. That creates a permanent change in our industry structure."

Cleo Capital's Sarah Kunst thinks the investing landscape focuses a great deal on the top of Maslow's hierarchy of needs -- in plainspeak, that's stuff that isn't really essential. Or, in Kunst's words, the kind of product that answers the question: "what will make you feel better in the moment?"Her investments are in companies that supply basic needs. "There's the whole thing on the bottom: where you do you live, where do you eat, how do you feel loved?' Kunst said on the Modern Retail Podcast.That includes Zero, which calls itself "the first plastic-free grocery delivery service" -- and is available in the Bay Area only, for now -- and StyleSeat, which aims to help beauty professionals run and grow their personal businesses.Kunst also started a scout program -- "when a venture fund pays for you to angel invest" -- and Chrysalis, a fellowship for tech workers laid-off as a result of the coronavirus (and curious to start their own businesses). "This wasn't us flying everybody to a private island for six weeks, it was 'hey, we have a Slack channel,'" Kunst said. "When you provide space for people, a lot of creativity just kind of flourishes.""We didn't turn people into founders. We took people that we believed could be founders and we showed them that a lot of what was holding them back was that zero to one. Candidly, they didn't even need an idea. Not every person started their own company. A lot of them joined with other people," Kunst said.

Before the pandemic, the zero (or low) sugar beverage brand Sanzo had all the scrappy upstart charm and aesthetic of a DTC brand. But, it still sold mostly through wholesale -- 70 to 80%, in founder Sandro Roco's estimate.That's changed. "Since the pandemic, it's completely inverted, and even more extremely so," Roco said on the Modern Retail Podcast. "During this pandemic, if you're looking at CPG sales and specifically sparkling water, a lot more folks are willing to order sparkling water to their home than many other CPG categories."That's good for Sanzo, which sells 12-packs of "Asian-inspired sparkling water" online, where subscriptions are possible, but also through bodegas, grocery stores, and soon, 50 Whole Foods outlets in the Tri-State area.Depressed advertising costs at the start of the pandemic led the company to "dust off the DTC playbook pretty quickly," according to Roco."I don't know that there will ever be an opportunity for a digital marketer like what we had in March and April," Roco said. "You had the combination of the powerful targeting that Facebook and Instagram have to offer -- which, obviously there's a whole other consumer conversation around data privacy and what not, but at least to a marketer, it's still a very robust advertising engine -- with also CPMs or ad rates that you've just never seen on this platform."Sanzo has also partnered with the Coca-Cola backed Iris Nova, through which it's benefitted from their text order platform.