An Exited Tech Founder’s Second Act in CPG | Sorosh Tavakoli, Stockeld Dreamery

Speaker 1: 00:00
Welcome to Shelf Help. Today we're speaking with Sharush Tabacoli, who's joining us from Manhattan. Saroosh is the founder and CEO of Stockheld Creamery, which is focused on reinventing the foods we love without animals. And uh Sarush decided to start with the cheese category, pretty quickly raised almost 25 million to really kick things into gear, which we'll definitely dive into the fundraising process as part of the conversation. Prior to Stockheld, Sharush built and sold a video ad tech platform before really going on what he called a climate impact sabbatical, which I think really ultimately was led him to start Stockheld. So, first off, just the small, maybe the small group of listeners that aren't as familiar with Stockhold, just give us a quick lay of the land, just in terms of origin story, why behind the brand. Definitely want to hear about what Ty came up with the name and then some of the core products you guys are currently offering, and then maybe just call out a few key places people can get their hands on them these days.

Speaker: 00:58
All right. Hey, thanks for having me, Adam. Yeah, so um so the origin story is uh I this is my second company after my studies in Sweden. I started a software business. We grew that to about 100 people, eight offices. We sold that in 2014. I then kind of entered this phase of, you know, what do I want to do with my life next? Had some time, had uh some money and uh a lot of freedom, and people told me you have you just lost all your rights to complain in life. So I began that journey and eventually I decided uh that I wanted to help save the world with cheese. The journey was basically I, you know, I pretty quickly decided I wanted to do something that was good for the world for climate change pretty quickly. I decided I want to do something with like a where the business model would be climate impact would be built into the business model. And that's eventually took me through the world of carbon capture, microalgae, and then food and specifically plant-based foods, very inspired by Oakley, Impossible, Beyond. And then as part of that, you know, realized vegan cheese is just absolutely terrible. And turns out cheese is a big problem from a climate perspective. It's about 2% of global emissions that come from the kind of very inefficient use of cows, as uh you grow all this food, put it in the cow, and then you get some milk out of the cow, and then you make cheese with that rather than making cheese directly with a plant. So that's kind of the origin story. And then so we we started out my co-founder Anya, who really had a she had the food science background, she'd done some work on fermentation and all the gooms, and that became really the core focus of us feeling that we could create better products because that's all that was really and still is like the core of where I come from and how I want to contribute is by kind of having that obsession around the product. So we spent about four years in RD out in Sweden, as you mentioned, raised about 24 million. And um, and yeah, now we have a product line which is a cream cheese line, and we have a sliced cheese cheddar line. Uh so the cream cheese is available in in three flavors. We've been in food service for about two years and launched in retail about two months ago. The uh yeah, also the cheddar is we have a cheddar now soon. Uh we have a smoke provolone coming out as well. And yeah, that one, yeah, we're we're that's available in the same channels. Uh retail-wise, we're only in New York, but yeah, I'm sure we're gonna talk more about that later. Sure. Yeah, I'm sure it'll be more places soon enough.

Speaker 1: 03:41
Yes. So you you might you touched on it a little bit. You spent the first part of your career in tech where you obviously had it had a lot of success before you pivoted in this this CPG world. I'm just curious, what was the so far at least, what was the biggest surprise or maybe misconception you had as you started diving in and building in CPG compared to tech?

Speaker: 04:06
I mean, I so the drive was I really wanted to work with something that you could kind of touch and feel, sitting always behind a laptop, and you know, everything you do is kind of digital felt so uh I don't know, not rewarding. I don't know, just so theoretical and abstract. So that was my desire, and I'm I I zero regrets, very, very happy to be working with food. I think the biggest difference is really the margin structure and how you know you end up with so little at the end. Uh while with software, you essentially keep it all. So that's very different. You can it's hard to be in a negative, you know, margin business as it comes to software. Usually, you usually can very quickly scale your way out of it, but with food, you can very easily you know end up just uh losing more and more money the more you sell. So I think that I would say that's that's been the biggest, and you can't overplan it too early as well. Sure.

Speaker 1: 05:09
So yeah, I think that totally resonates with me for sure. What's been the the most exciting part on the other side?

Speaker: 05:17
Well, I think I think every single person you meet is intrigued and want to talk to you about what you do, and that's really fun on so many levels. I think everybody can relate to food. We all eat every day, we all have a point of view on whatever, you know, what we eat, what we think is healthy, what's good for the environment, what we think about bagel culture or how you like your burger smashed or not, or you know, and it's just fun to be so deeply embedded into culture.

Speaker 1: 05:45
Yeah, totally. Outside of the the mar the difference in margin, which I think is pretty obvious compared to tech, where that's where the best margins are in the world. If if uh if you had another friend that had a similar background, do you had some success in tech? Maybe they exited as well. They approached you and said, Hey, I really like what you're doing in the CPG world, seems really exciting. I'm thinking about building a brand in this space too. And they asked you what they should expect for just say maybe some advice or or tips or things to watch out for that could really trip them up. What would be let's just say two or three things that you tell them?

Speaker: 06:23
Yeah, it's a great question. I think first of all, is kind of just to be very thoughtful around the actual consumer need and be very uh cautious as it comes to trends because I think there are it's a very it's there's a lot of trends, but then you know what actually has staying power. I think I would really caution them to think twice about it can't just be about a certain claim or two. So I think I'd I'd be thinking really hard about what what would have staying power. Second, I would uh, and this probably reflects uh some of the mistakes we've made, which is just realizing that things will take time and and and not over planning, not over-staffing, not overspending, and uh trying to be very, very lean for as long as possible because there's just some natural cycles that are required to build a business. And yeah, I guess I guess the third thing is kind of very related to that, just it just takes time, right? And with that, I think also comes the fact that I think you do need to have some personal passion, I think it's very difficult to uh I would say that about any industry to come in and just try to make some money. That's that's just not how it works. Yeah, you want to make money, go get a job and just uh don't spend so much.

Speaker 1: 07:52
Yep, yeah, totally. I think those are all really helpful. Diving into the weeds a bit more, wanted to talk about the product a bit and getting to some of the form factors you've got in in market today. You can correct me if I'm wrong, but from what I read, I think, and maybe you mentioned it also that the RD process was a pretty long journey. I think it took three or four years or so. I'm curious, looking back from the beginning to where you got to the final form factors of at least the first the current products you got in the market. What were some of the key stages of that process and what key partners did you have involved? And how'd you go about finding those those people that really helped you get to finally the form factors that you're happy with?

Speaker: 08:34
Well, we we built this company in the in the golden age of food tech, right? So with a lot of capital, we ended up building out our own internal team. So we did most of the work ourselves. It was certainly a very special time when it really was like a race to try to build, you know, there were like a lot of gains in the in the milk space. You know, you had the meat race was off. There were kind of some winners crowned, but the cheese category really struggled to struggle to grow and struggle to convince consumers. And we felt it was a very clear need for superior products and for some something new to come in and and um offer something better and and that way convert more consumers. We had a belief early on that that these products had to be, we we want to develop something that was more authentic. And more authentic, we felt the nutrition was also quite off, and then almost every other aspect of performance, whether it was taste or you know, appearance or functionality, meltability, you know, mouthfeel, I mean, you name it. And we bet pretty early on fermentation and on legumes as kind of the two core parts of it. So fermentation is you know, a 10,000-old technology, a processing technology where you have basically bacteria go in and nibble on the different parts of the food, and that way recreating it with lots and lots of complexity because you don't really know uh what cultures are thriving, and there's different phases and you know what the byproducts will be. What you do know is that it's it's essentially like a pre-digestion. So you do end up getting a more acidic product. Uh the pH uh is lowered, it becomes actually more food safe that way. We know that it becomes more cravable. It's definitely a lot of the fermented foods are the ones we crave. And once you get into it, it's sometimes there's a bit of a learning curve. You know, you need to have it once or twice. And then once you're in, you're kind of hooked on it. So and yeah, you it just brings a lot of complexity to the flavor and to the texture as well. That I think obviously very much defines cheese as we know it. So that's kind of where that came from. Now, when you ferment, you also need protein because that's what the bacteria nibbles on. So having protein, a lot of the vegan cheeses don't have any protein, while dairy cheese has a very high protein product. So it just ends up being very different from a texture perspective, from a bite perspective, uh, from a functionality perspective. So that was another thesis we had. Okay, we yeah, we want to work with fermentation, but we also want to have a bit more protein in the product. Working with plant proteins is very challenging. There can be lots of off notes, off flavors, there can be sandiness and many other challenges that you know you kind of avoid when not when not having them around. So that was a big that was a big part of the challenge. And again, the fermentation was a big part of the solution to that as well, where where you can get rid of a lot of those off notes. And so those were the two components we were playing around with. We we screened more than 500 different proteins and combination. We knew we wanted probably more than one as well, because you get different characteristics, and then we had you know early luck with our kind of soft cheese platform. Um, and the soft cheese platform ended up, you know, in a cream cheese, beta, sour cream. So it's kind of the same technology, same kind of base. And then on the melting side, we were trying to we wanted to make a hard yellow cheese that was initially very much targeted towards pizza, the biggest market. We struggled. Eventually, we realized we were not going to be able to hit our own ambitions and our own bar in terms of quality. So uh, while we realized that the product we developed was going to be perfect for slices, so on a burger, in the grilled cheese, etc. So we pivoted that quite a few years into the into the process. And one of the, yeah, so so the different, you know, the different parts of it are you first have to develop some kind of a core technology, you then have to find a co-manufacturer who can actually manufacture and produce at scale. Usually your bench top product is much better, and you know, it's it's just very different as well compared to the equipment in the facility. So that was another another big part of it. And then um, you know, once once you have a great product coming out of a facility, then you know you're you're ready, right? There's all these gates of like having a bench top product that is promising, then finding someone and doing a trial with them. Usually you do a smaller trial. That's kind of another. And then at the same time, you're like, how much should I engage customers? How much should I engage? Think about the brand and the packaging design and all of those things that have long lead times, but also are very costly. Some of some of them can be like printing packaging. And at least with the capital we had and the worldview we had, which was all about speed, we ended up doing everything too quickly, which ended up being very costly. But um, yeah.

Speaker 1: 13:50
That's a great background. That's super helpful. From what I know, a lot of the nut or a lot of the plant-based cheeses, a lot of them are nut-based or primarily nut-based. And you can correct me if I'm wrong, but from what I know, you guys decided to focus on legumes versus nuts. I'm curious what what factors led you to ultimately decide that that was going to be the best route for you and what was going to help, I assume, make a more differentiated product.

Speaker: 14:16
Yeah. Well, most of the vegan cheeses are not made with nuts, actually. They're usually like a starch and fat. So that the market leaders are Violife and Deia. And even like, even yeah, if you think of a tofudi, I guess that's soy. But then you have, yeah, you have the myokos, the kite hill, and a few of those kind of almond cashew-based. And a lot of the dessert cheeses, they're all the premium nice ones, uh, are all a cashew almost exclusively. So we see kind of two worlds. One is the starch and fat, they're they're usually like they use industrial processes. It's a it's a very bland product, doesn't taste anything, but then they add kind of cheese flavor to it, cheese aroma, and that's what people usually refer to. Oh, it's very plasticky, or you know, it's it's very fake. It has this very weird texture and it doesn't melt, etc. On the other side, you have the nut-based cheeses that have two things. So they can be actually taste very authentic because they're fermented, they use whole food ingredients, very clean label usually. But then the challenges are they don't really taste so much like cheese. A lot of them, they can be way more tangy, acidic, and have kind of their own flavor, which can be very nice, but more as an almond paste or like a fermented cashew paste rather than a cheese. You also don't get the creaminess. They're way more again, when I say a paste, it's more like a hummus type texture where you feel the different components. And then price as well. I mean, it's you know, you can't we can't put cashews on all the pizzas on in the world, you know, that's just not going to work.

Speaker 1: 15:58
Right.

Speaker: 15:58
So those are some of the, and then using legumes, legumes are super functional, very accessible. And yeah, we also believe they're way less kind of sensitive to climate impact or you know, volatility that way. Yet they bring the protein and uh a lot of the other things that we want.

Speaker 1: 16:15
Shifting gears to the sales channels for a bit, um, a bit of a side note. I wrote a small check into an early stage brand out here in the Minneapolis area where I recently moved, that's they're almost entirely focusing on school districts as their initial beach head or go-to-market strategy for a variety of reasons. But I think this could end up working well for them, just from the perspective that if you get kids really passionate about a product or your brand, they're probably gonna start eventually going home and asking their mom to buy the products at the grocery store so they can have them at home as well. And it seems like the food service channel can have a bit of a similar effect in terms of restaurant patrons. If you're, you know, if a burger joint is using your cheese slices on their burgers, eventually they're gonna start looking for that cheese at the store if it tasted really good in that restaurant. I'm curious for Stockheld specifically, what was that thought process surrounding that strategy to focus on food service for the the first year or two, it sounded like?

Speaker: 17:11
Yeah. So there's reality, is it is like the easiest way to do it and and kind of the fastest route because the retail packaging, once you the MOQs are very high. So by the you know, by the time you print that and it takes a long time, you cannot change your formulation. And specifically, like with a product like ours, where we've been constantly modifying, optimizing, we you know, it was a brand new technology. So there's been things that we've modified. We knew that as soon as we hit print on the packaging, we can't change anything, or ideally, we will wait 18 months to do it. So it was pretty useful from that perspective to be able to launch a product in food service, and you can easily just reprint stickers as you optimize the product initially. So that was kind of one big rationale for us. Second, I think, yeah, we, you know, vegan cheese is has a terrible reputation. A lot of people, it's it's definitely not an accepted food. It's kind of on the fringe. You know, you have to kind of explain yourself why you eat it or, you know, uh it's kind of frowned upon. So we felt, and and this is also part of us being in New York City, being in the cultural kind of epicenter of the country, and maybe one of the cultural epicenters of the world, we have the chance to really make this product kind of acceptable. And doing that by working with some of the best in each of the categories. So some of the best bagel shops like Essa Bagel or Shelski's or you know, old Brooklyn bagel that we're doing something with this weekend, etc., all kind of or Apollo bagel, not to mention them, right? So if these people and these locations are serving this product, have decided, picked it, it must be if it's good enough for them, it's good enough for me, kind of thing. So that's uh uh we've done that on the bagel side, we've done that on the burger side with you know, Gotham Burger, we've we've done that with a number of other like Five Napkin burgers, another great location. So it's a great way for, I think, to for kind of co-branding and becoming legit. It's also a great way to have people sample the product because it's a huge risk. You know, do you want to buy a tub of cream cheese for six, seven dollars? You've probably bought a lot of them and didn't like them and thrown them away, especially in our categories. So we know people are quite careful, yeah, because they've been burned. So it's a good way to have people try it as well before maybe they go to the store and pick up the product. We've also used a lot of our customers as basically ad space. We've done special sandwiches or just you know, asked them, hey, can we have an A-frame out to promote the new product? Yeah, it's it's amazing. At one point, we had 40 A-frames across New York City, and every day we got photos from our friends saying, Oh, you guys are everywhere, I saw you here, I saw you there, and it send us all these photos. So that was a very efficient way of getting the word out there in the perfect context for us.

Speaker 1: 20:14
Yeah, I mean, it sound it sounds like there's a lot of benefits and reasons to focus on this channel. You talked a lot about pros, any cons that you found about the channel or challenges you.

Speaker: 20:26
Yes, absolutely. It it, you know, I think the channel is very price sensitive.

Speaker 1: 20:32
Yeah.

Speaker: 20:33
I mean, at least for our kind of product, it's it's kind of just an ingredient at the end of the day. So I think yeah, they're just very price sensitive. And if you have a product that is premium with better ingredients, you know, a fermentation process, some protein, cleaner label, all these things cost money. And so it's just difficult to charge what you need to charge so the margin can be channel challenging. I would say it is a barrier to get in through the door because if they have something that's kind of working already, why would they change it? So there's it's definitely quite a slow sales momentum as well. And then the biggest barrier by far is distribution. So building up, getting into now, two years in, we work with a with almost 10 different distributors. So one of the most important things for them, if you go to most customers, say, what I care about is uh the quality of the product, the price, and can I get it? And if it's not on the truck that's already coming, delivering stuff to them, that is just very, very difficult. That's the actually the beauty of working with the best locations because the best locations don't, they're willing to put in the extra time and effort to get the products they really want. Now, we work, you know, after all this time, we work now with Cisco, with US Foods, with PFG, with Baldur, Ace Natural, all these guys, but it takes a long time and it's all the time a chicken and egg problem. Problem of like, you know, do you have customers who want it? No. And then you go to customers, oh, do you have it in distribution? No. And then you have to like self-deliver a bid and like get that get both sides going in a way. And then uh yeah.

Speaker 1: 22:15
So I would say that's that makes a lot of sense. You you talked about it can be a bit of like a long sales cycle for brands where this channel does seem to make a lot of sense from what you found. What should their strategy look like in terms of opening up and and and growing this channel? Like whether it's simple things or more tactical things, like having a really dialed in pitch deck and go with restaurants. I imagine that maybe isn't the thing that works as well with them versus retailers. But yeah, what's yeah, what's what have you found works?

Speaker: 22:43
Never never ever use the pitch deck. So so what they I mean, you know, it's all about the pounding the pavement, street hustle, right? We've done this so much. My colleague Ben is is amazing at this. We uh we just Google maps, bagel shops, and just start walking around. I mean, that's how we started. And then for us, we we we did a list of the top 10 bagel places. We said, who are the places that we are willing to call 10 times? We're gonna keep calling, emailing, LinkedIn, you know, until we get some kind of a response from them, right? So we made that list and then we just try to really focus on them. And it was actually paid off really well. We could tell them we made a top 10 list, you're on it, we'd love to work with you. Here's the product, here's the story, we're willing to do marketing with you, we're willing to do all these things with you. And that that worked really well. So that would be one advice. And then I think as you do that, you can start getting a sense of is this going to be a business, a real channel for us, or are we going to do this for marketing purposes? And I think then if you know it's only for marketing purposes, you can evaluate each customer to take on based off of that. Because then you want to make the most of that partnership, right? Make sure that they promote you, you promote them. Can you send some influences there? Can you do different things to maximize the value of those partnerships?

Speaker 1: 24:08
Yeah, those are all really helpful. Shifting away from food service, you mentioned the beginning, you just recently launched and it expanded into retail just a few months ago. How's it been going so far?

Speaker: 24:21
Yeah, it's been it's been surprisingly well. That's great. Yeah, which honestly, almost nothing so far has gone surprisingly well. So when I say it, it actually means a lot. It's been there's been a lot of challenges along the way. But so we decided to launch with the local distributor. We launched eventually about nine nine weeks ago, I believe. They sent out an email saying, hey, you know, this is a new product. And I believe our packaging stands out in such a way that I think about 50 plus stores just placed an order straight away from the email. Which again, we were not used to this in food service. We had to go call them five times and nag and you know, please. But they just were like, Well, this looks really cool. This looks sexy, this pops, like this is different from what else we have. I'll order a case or a few cases to see how this does. So that's been really helpful. We have obviously not, we did not expect that. So we've been pounding the pavement here as well. I mean, benefit of being in New York is that you can get around fairly easily and it's very dense. So we had a a sales blitz where the whole team came in. There were five, six of us at the commercial team, and we divvied up the full city and went to each area and just walked in. Hey, you know, we've launched this new product. And and we had also the list from our distributors, so we already knew where they were distributing to. And after that, we were close to 100 stores after that first two weeks, uh, which was that was our goal for the first month. Then uh, and then uh yeah, we just hit 200 stores last week, which is really cool. That's awesome.

Speaker 1: 26:00
Congrats.

Speaker: 26:01
Account is not really what matters. Uh, you know, we know a lot of those we're not gonna get reorders from. We know it's going to come down to the 50, probably key accounts. So that's really where we're focusing, trying to make sure that we have uh great visibility, point of sales uh material, uh that we build relationship with the with uh with the buyers, that we if something is not working, you know, maybe can do promos. Super important thing is demos, that that is the one thing that we feel the most confident actually works. We've done a lot of other things, but it's it's a bit hard to know you know if uh what role they've played uh in in the success. And yeah, that's kind of what we're trying to obsess about. We're tempted every week. Should we go out to Long Island? Should we go deeper into New Jersey? We're like, no, no, no, let's stay put, let's just keep driving velocity in kind of home court before we go further.

Speaker 1: 27:02
Yeah, that seems like definitely the right strategy. Pretty much everyone I talk to is a question I often ask because it definitely seems like some of the first time, earlier stage CBG founders, they want to just get into as many doors as fast as possible. But velocity is really the name of the game. If they're not moving on the not moving quickly and you get kicked off, you know, kicked off the shelf, it's much harder to get back in, right? So it seems like what you're doing is 100% the right strategy. Um on that to on the simpler topic, so you you mentioned you you partnered with, I think, I think you said like 10 different distributors. I think you've partnered with at least like you know a local New York distributor as an example, I think for your initial retail launch. Sounds like it ex it's expanded since then.

Speaker: 27:42
No, I actually you know, so on the food service side, we have 10 distributors.

Speaker 1: 27:46
Okay, got it.

Speaker: 27:47
On the retail, it's only one now, and and we're onboarding with UNFI this month. Oh, nice. That's kind of our yeah.

Speaker 1: 27:54
I was gonna ask on that local New York distributor you started with, how'd you decide on this specific one? I imagine there's a fair amount in New York competing for this. What what did they do to, or the variables that you had top of mind that helped them win?

Speaker: 28:08
Yeah, I mean, we so they came in through recommendation, they used to work with uh good culture, uh the cottage cheese business, and and we we know someone there that helped us a bit of figuring out this is uh, you know, they are Hasidic Jews, super efficient, you know. In the contrast to going to a nice law firm where you're like, now I know why they are so expensive. I'm paying for all this stuff. They're the exact opposite. You go to their office and you're like, wow, now I get why they're charging a very, very low fee. They also have great reputation with the stores. Every store we went to, they're like, Oh, you work with JJ, like, very impressed. They're very good people, they know they get a good service and very good prices. So that's kind of how we we decided that given that we have our own local team in New York, we're going to do the sales. We don't need because some distributors would offer some sales capacity as well. These guys don't. So yeah, we said we'll do it ourselves and we'll have a higher margin for us and a lower price for the consumer. So, you know, it's like a double double win. And yeah, we've it's been working really well with them. We've dedicated a lot of time and attention to it. Um yeah, so that's how we end up. Yeah, Unify. Unify will be next up. That's driven by, so we have next up, we're launching with new seasons and market of choice in Portland uh and in Oregon. So that's driving then the Unify onboarding. And we have a we have a number of other launches that are quite imminent. Yeah, that are who are with Unify. So yeah, feeling very good about that as well. But it's also clear we see some of our competitors are priced a lot higher. And we we can see that that comes. We also know that if we had been through Unify in New York, we would have been priced, you know, a dollar higher probably or 50 cents higher. Yeah, that makes sense. So yeah, that we've we feel good about that being able to be more competitive.

Speaker 1: 30:07
Right. Thinking about when you, I guess first when you approached that local regional distributor in New York, and now with UNFI, thinking back to those, what did you do to get prepare the brand and for yourself to start approaching those retailers? And just for some advice for CPG operators that are a little behind you as they're gonna start this process, especially with the UNFIs of the world, how can they best position themselves and from a negotiation standpoint? Because I know you know the bigger distributors they can take a pretty big hit tier margin.

Speaker: 30:36
Yes. So we we said, you know, in New York we're doing it ourselves, but nationally we work with a broker called Cultivate CPG. We've been very happy working with them. We, you know, our expectation is was that they were they were gonna put us in front of the right people, and they've been very successfully doing that. And then, you know, it's up to us to to impress them and and you know get the deals closed, but that that's ultimately all you can expect. So that's kind of how we've been managing that. That's been great, you know, getting directly to the right person, the right purchaser in the time of review for them. So that's been really useful. Um, yeah, and they've also helped us with UNFI. I mean, the most of the negotiation happens with the retailer anyway. Haven't seen any hardcore negotiations happen, honestly. They have their margins and the goals that they need to hit. And yeah, yeah. Yeah. I mean, what what what we've been very warned about, let's say, is all the fees and all the hidden fees and also all of the wrong fees when you're billed incorrectly.

Speaker 1: 31:40
Your packaging really stands out on the shelf in general, and it I would say it really stands out amongst this plant-based category, let's say, especially the plant-based or dairy-free cheese category, let's say, just thinking back to that original creative brief you put together, whoever you worked with, whether that was internally or creative agency or some sort of freelancer, what was that? Just thinking, yeah, thinking back to that creative brief. What was your vision and what did you feel like were the most important points you wanted to call out on the package?

Speaker: 32:11
Yeah. No, that was it's it's very interesting because the packaging design was done like almost four years ago, four ahead of our Swedish launch. And and and it even comes back to like the name of the company. And we did we went pretty deep on trying to you know capture the essence of the of the company, of us as founders, of you know what we wanted, what we wanted to build, and try to as much as possible, almost like not relate too much to what else is being done and who else is is doing something, right? Obviously, we did look at the shelf and we did look at competition, and we we we wanted like so the like the name, for example, the name came out of almost like wanting to have friction, wanting to have a name that is a bit difficult, not having you know, an oatly or cheese should be a bit complicated, right? Real food has is about heritage, it's about terroir, and so that was kind of the Swedish connection, but with an English name as well. So the dreamery is kind of the visionary part, you know, forward-looking, but Stockheld is is means campfire in old Swedish. So it also refers to Stockholm or you know, home hometown. Um, and it just to me, first time I I saw we were brainstorming, I saw the name Stockheld on the whiteboard. I was like, I saw this like British cheddar, black cheddar, you know, wax covered, and it kind of communicated to me at least a lot of flavor. I just I just felt like just a lot of flavor in that name. So, anyway, that's kind of where where the name comes from. And the dreamery is obviously anything that a creamery canon should be, right?

Speaker 1: 33:57
That's kind of where that comes from.

Speaker: 33:58
Um, and it was a bit similar with the with the logo. We had actually some people can't fully re see that it's two E's that are you know the staircases in the logo, but we kind of felt like we don't care. You know, like it it's okay if it's a bit difficult. It was something that felt very right from the get-go. The font was actually a brand new font from this German font developer uh that our designer kind of knew uh and we just we just loved it. Uh it was also like came out uh when we saw it, we knew it was it was us. And then the packaging was um was really driven out of obviously the graphical you know uh identity. But I don't know, I've I I've always been down to you know culture. I I I love hip-hop, I love a lot of that kind of the culture of like almost, you know, I don't know, like rapping and the attitude that comes with that of like wanting to do something, being in a vibe, being in the flow. And you can see that on my t-shirt, you know, like here, like uh do it for the culture, which is referring to obviously culture cheese, but also being for culture. That's a lot of the elements that went eventually into the the packaging, which which is really cool and does not communicate health, does not communicate, you know, a clean label or those things, but just kind of has like a just like has the right vibe to it. Yeah. Totally. We also try to keep it very simple, obviously, not claiming too many things. There's packaging talks about it being, what do we call it? Creamy and uh tangy, right? So those that we we wanted to call it light as well, but FDA you can call it light because it it kind of implies low calories, but it is more light than the dairy product. So I think that's also a differentiate, but that's also what people always say. Oh, so creamy, right? So creamy. And then, oh, I like that little tang. Oh, it has that like that tang to it, which is like uh comes from the fermentation. So those are the things we call out. We have a tiny uh founder story, uh, which I so the cream cheese you can actually open up and it has like a text inside. Should I bring a pack? Does that yeah, for sure? Bring it out. Yeah, yeah. So this is the packaging, right? So we have the tangy and creamy, is kind of the two ways we're describing the product. Um, and then we also have the plus probiotic cultures. So we're also very careful. We don't want to say that it has probiotic effects or it's good for your gut. But those are very bold claims to make. And but but we the product does have close to actually a billion the CFU um colony forming units, I think it's called.

Speaker 1: 36:52
Yeah, I didn't heard that abbreviate that that yeah.

Speaker: 36:56
So that's uh bacteria per serving. So it's pretty cool. But yeah, the the lid is really kind of I think where where it stands out and it just feels like I don't know, like a cool um cool thing. Yeah, anyway, so that's yeah. Oh, I would want to tell you about the so at least here's a little um Easter egg because we don't say that there's anything here, but if you open up the the cream cheese, you you actually get like a little extra information about the brand. There's a tiny kind of founder story, there's a there's a recipe from Apollo bagels of our kind of super uh our favorite bagel, and then talking about what culture always culture refers to.

Speaker 1: 37:39
Um it's all just really well well designed, really well put together. I think it's uh I think it's only gonna continue really well in retail.

Speaker: 37:47
Thank you. And then we have the we have this, and this is also like a we've done some optimism. This is um this packaging is a lot more affordable. So we have a new print on this where like the barcode went on the side, classic things that that you know you get wrong. But yeah, the slices sometimes come out in different sizes, so it's been a bit challenging to get it right, but this also I think really pops in the shelf. And here, what we've thought about in terms of the packaging is really call out the one key benefit, which is it melts. Yeah, it's a massive consumer problem. Other products don't melt, ours melt the best, and so that's kind of what we've called out. It's called melt, the tea is melting, it's crafted for melting, it shows a melted product, and in the back, it's like, how do you actually melt it? Right. Really smart. Like, do one thing, do it well.

Speaker 1: 38:39
I think that's that's makes a lot of sense. I mean, yeah, it looks really good. I'm curious as for yeah, first-time CPG entrepreneur, they're just getting ready to start kicking off this packaging design process. Looking back to obviously you've gotten a place that looks really good, but maybe it didn't start that way. What are a few things you tell them to keep top of mind as they're about to go through this packaging design process?

Speaker: 39:06
Well, I would say I I think it it's worth to do the to do some solid groundwork of understanding who you are, what you stand for, what you want to achieve. I would really encourage people to, you know, we told our agency actually, we said, don't filter out your ideas that you always have to filter out. Because every time most agencies, most of their customers are big and they vote in some kind of a you know quorum of like a big team, and it gets watered down by every version, right? We said, no, we want something bold. We want the ideas that you know you can never get through. But like those are the ideas we do want. So obviously, that got them very excited. And so I think that's something also you have to tell the agency because otherwise they're just gonna give you the vanilla versions that they are used to. And then and then comes the hard bit, which is also like don't overdo it because you'll probably have to redo it anyway, and that's where you're stuck, I think, as a as an entrepreneur, because the cycles are so long, the cycles are so expensive, yet you know you have to go through a few cycles because you are going to change. Like we changed our preservative from you know, something that wasn't natural, not allowed at Whole Foods, is that we change it to a natural one. We just had to do it, and we had to reprint the cups. So you just need to expect that some of these things are going to happen while you don't want to take too many shortcuts from the get-go, and that's why this is hard. It doesn't get easy necessarily, even with the best advice.

Speaker 1: 40:44
Yeah, that's all really helpful advice. Totally shifting gears again, talking about fundraising for a second. You obviously had a lot of success really early on raising 25 million early on pretty quickly, especially in the CVG space, is is difficult. I know you mentioned you felt like you timed it really well just in terms of the food tech hype and and whatnot, but I still think you must have done a lot of things well. Um but I'm curious for what did you find? What's been what was different about fundraising for CPG versus in tech? And what did you find worked well?

Speaker: 41:18
Well, the caveat is you know, we raised money in a time of extreme hype and and boom. So we all believed we are investors, we all believe the world was changing very fast, and it was a race against time, and we had to, you know, the companies with the biggest guns would win almost, right? Like that kind of mentality. That is a big part of it. Now, that doesn't mean that all the vegan cheese companies, you know, raised this much money because most of them didn't, right? For me, came down to I had already built a business and and returned some good money to investors. I think that built a lot of confidence with them. So I guess it's just unfair, right? Like it's it's it's just like now with you know the David, the bar, you know, like what he's done, like with what where he comes from, he put in the first money, like you just can't do that first time around. So I think that's one thing. I think I guess what everybody's talking about right now is you have to be super lean. I mean, what what we did was the opposite, right? We were not lean. We were talking about a very big game, super ambitious plans, talking about years, years out of things that were very fuzzy. Now it's the exact opposite. You have to know your business inside out, know the numbers, uh be very, very thoughtful, understand your margins, you know, your path to profitability, all of those things are now kind of way more important. And you have to show the grit, the resilience, the hustle, the willingness to be coached and adapt, and and now those things matter, right? I think the challenge, you want to do that while having a vision, right? While also thinking big, because you also don't want to get too limited. And then finally, I think that the biggest advice though is you have to don't think about investors. Think about your business and what your business needs. And it's so easy to try to please an investor deck or you know, do things to raise more money, but ultimately comes down to your own business and what is it that presented all also like as honest as possible. Talk about all the flaws, all the risks, but also the benefits, and that then you get a balanced view. Equally, when the investor comes in, you don't have surprises and you know a sense of disappointment when the investor comes in only to learn some things you didn't share, etc. And I think it's all it's a very long-term relationship.

Speaker 1: 43:48
Yeah.

Speaker: 43:49
But also founders get lost, you know, initially.

Speaker 1: 43:54
To that point, I've been a part of Pass Company, help start Pass Company. We raise a lot of money, and one thing that I learned of that was that which I think a lot of first-time founders miss is that fundraising is, I mean, one thing people always say that fundraising is a full-time job, which you know, but they also say is like a lot of people they don't run like a really well-organized and button-up actual like fundraising process. Like, what is a yeah, what does a well-organized like fundraising process look like for you? And what do you feel like maybe first-time founders miss or get wrong at actually building and running a fundraising process to a certain extent?

Speaker: 44:28
Yeah, there's a lot to be said about that. I think you need to, you know, put a deck in order. Like, it's almost like first convince yourself, like you know, find a good, good, good story that you believe in yourself, build out your model. Yeah. And then I think you want to start trying it out, you know, because every every time, every time you pitch, it just improves. You know, you can adapt something, you're like, oh, that made no sense. I'm gonna take it that way. Or and then you'll get good insight as well. They'll have good investors will give you some advice or feedback. And but then ultimately, at some point, uh, at some point, you need someone to shoot. And as soon as the first person shoots, you get that term sheet, it's game on, right? And I think at least a lot of the challenges when we fundraised last time was nobody wanted to shoot, and everybody wanted to just like follow, like, oh, we'll follow. We love your company, but like let us know when you have a lead, we invest a million on the back of, you know, blah, blah, blah, blah. And it's quite frustrating because you're like, it's your job to like do some work. It was almost like we don't want to do the work, let someone else do the work, we'll just tag along. But yeah, how do you create sense of urgency? Sometimes you have to fake it as the wrong word, but like manufacture sense of urgency and structure and say, well, you know, we're expecting term sheets by this date, challenges if you that date comes and there were no term sheets. How do you explain that, etc.? So there's always that kind of I I do think it's important to, yeah, and then another well-run process is to just have a lot of good news that you're drip feeding on LinkedIn or or to them in meetings, etc. Those things can also be useful. Yeah. Those are helpful. Those are some of the things to have in mind.

Speaker 1: 46:14
Yeah, super helpful. Yeah, Sarush, this has been awesome and really appreciate the insights, a lot of helpful stuff here. Where's the best place for people to follow along with you personally? And best place to follow along with Stockheld as well.

Speaker: 46:28
I think the best place uh from a consumer perspective, it's uh definitely Instagram. That's where we are the most active. So that's uh stockheld underscore dreamery. Perfect. It's orange. Just uh when you see that or uh the orange logo uh go there. Um and then uh for me personally, it's LinkedIn. That's uh that's usually I don't I don't post very often, but uh I uh but that's kind of one good place to follow uh follow me in my journey. I'm all uh yeah, not not as much on the on Instagram. Perfect.

Speaker 1: 46:58
Awesome, that's been awesome. I'll appreciate the time. It's been great. Thank you. Yeah, and check out our website too, stockhill.com. Perfect. Yeah, we'll definitely we'll definitely link that in the notes for sure.

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