Caroline Cotto
Even if direct-to-consumer isn't all of your business, I think there's definitely ways to make it a strategic important part of your business and your marketing strategy at large.
Chase Clymer
Welcome to Honest Ecommerce, a podcast dedicated to cutting through the BS and finding actionable advice for online store owners. I'm your host, Chase Clymer. And I believe running a direct-to-consumer brand does not have to be complicated or a guessing game.
On this podcast, we interview founders and experts who are putting in the work and creating real results.
I also share my own insights from running our top Shopify consultancy, Electric Eye. We cut the fluff in favor of facts to help you grow your Ecommerce business.
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Hey everybody, welcome back to another episode of Honest Ecommerce. I'm your host, Chase Clymer. And today, I'm welcoming to the show Caroline Cotto, the co-founder and COO of Renewal Mill, a company helping fight food waste by upcycling byproducts into nutritious flowers and delicious plant-based products.
Welcome to the show, Caroline.
Caroline Cotto
Great to be here. Thanks so much for having me.
Chase Clymer
So for those that aren't familiar with Renewal Mill, can you quickly talk about the types of products you guys are actually bringing to market and selling these days?
Caroline Cotto
Absolutely. Yeah. So you rattled off a bunch of buzzwords. But basically, at the heart of it, what we sell is gluten-free flours and vegan and gluten-free baking mixes and ready-to-eat cookies. And all of those products are harvested, for lack of a better word, from the food system.
So we're looking for byproducts of other processes like making plant-based milk that would have otherwise gone to waste and finding ways to turn them into new delicious products.
Chase Clymer
Absolutely. So take me back in time to when the idea or the concept for building this business came from.
Caroline Cotto
Absolutely. So I have a co-founder named Claire and Claire started Boston's first organic juice company. So she was taking a lot of care to source locally grown organic produce and then juicing it.
And so at the end of every day, she was left with a giant mountain of fruit and vegetable pulp that she couldn't use. And so she tried, trying to bake it into muffins or use it in crackers, but there was just way too much of it.
And it was painful, not only from an economic perspective, because it was really expensive produce, but also from an environmental perspective to throw all of this out.
We then had a fortuitous conversation with the owner of a tofu company. And he was essentially like, that's very cute, Claire. You think you waste a lot in your tiny one-off juicing business.
I'm wasting tons and tons of pulp on the magnitude of 50 to 60 tons of pulp a week at my soy milk and tofu facility. And that is just going directly to landfill.
And we said, there has to be a better way to keep all of that valuable nutrition in the supply chain because we're actually processing most of the fiber and protein out of our food.
So the idea for Renewal Mill was born to figure out how can we take this pulp and turn it into something that we can use to feed people.
Chase Clymer
Yeah, that's a fantastic idea. So did you and your partner have an idea of what maybe the first product would be or… walk me through the next steps if we have a great opportunity here with these by-products and we know there's something we can do with them. How did you get to an actual thing to sell?
Caroline Cotto
For sure. So we actually started with that soybean pulp left over when you make soy milk, which is the first step of making tofu. So we got our hands on some of it. Quickly realized that it's actually a... traditional Japanese product.
So if you made soy milk at home in a country like Japan, you would never throw away the pulp. You would use it by sauteing it with vegetables or using it in baking.
And so we just started to play around with it and realized that we needed to make it shelf stable as quickly as possible, because when it comes off of the processing line, it's about 80% water. So it starts spoiling very quickly.
So our first step was how can we make this shelf stable and then mill it down into a form that would be familiar for American home cooks. So that ended up being flour.
And then we started baking with it, all sorts of things from your chocolate chip cookie to your banana bread, to pizza doughs, and quickly found that it had a really neutral taste but was packed with all of this nutrition.
And so that product, the name for it is Okara, which is the traditional Japanese name, and we sell it as okara flour on its own.
But then we quickly realized, you know, bringing a novel ingredient to market that no one's ever heard of is challenging. So we needed familiar vehicles to introduce this novel ingredient.
And that's when we launched our ready to eat cookies that feature the okara flour, as well as our baking mixes, which are super easy to use. So just add oil and just add water, and you can have homemade delicious baked goods in minutes.
Chase Clymer
That's amazing. Now, that sounds simple enough, but I'm sure it wasn't that simple. And I'm sure it wasn't as quick.
So how long was the ideation process and how many trials of baking with this product did you go through before you started to get in and hone in on what you're going to launch with?
Caroline Cotto
Yeah. So Renewal Mill has actually been around for 7 years at this point. The first 2 years of the company were grant funded and we were really just figuring out how do we commercialize this flour. How do we take it from its wet form in the factory and turn it into something shelf stable and functional.
And that took about two years. And then we started, we thought we were gonna be an ingredients company and just sell it B2B.
But we quickly realized that in order to drive demand on the B2B side, we needed a consumer facing product to build the market for upcycled food. And that's really where our e-commerce website came into play as well.
So we launched RenewalMill.com to share all of these products directly with consumers and sort of get them to help us drive the demand back to larger companies that upcycled food is something that they were looking for.
So, it's been a labor of love.
I think we really spent the last five years not only building our business but helping create the Upcycled Food Association, which is the only trade association for upcycled food businesses.
And under that, launch a certification for upcycled food to help drive awareness and trial. And then really just figuring out creative ways to get these products into people's hands so that they could become brand evangelists for us through limited time offerings on our website and things like that.
Chase Clymer
Amazing. You guys are doing so much good work over there.
Now, talk me through the go-to-market strategy. And maybe we work through them individually because you've got the business-to-business side and then you've got the business-to-customer side.
So the original model was to be an ingredients company that's traditional B2B sales. So when you're launching a business like this, what was your go-to-market strategy and your tactic to try to get those wholesale accounts?
Caroline Cotto
Yeah, I think especially before the pandemic, on-site sales were really important for us because we quickly found if we sent this unknown ingredient to the R&D department of some large company, they would just put it on their shelf and say, thanks, and never actually use it.
We had to be really strategic, going to them and bringing them products made with our ingredients to show them how easy it would be to use this ingredient. But we also found that the average sale cycle of ingredients in our space was about three to five years.
And so we need some way to generate revenue in the short term, which is really where the B2C side of the business popped up in order to kind of have the time and the bandwidth and the funding to work on some of these larger fish accounts on the ingredient side, because it's just a much slower cycle.
There's a lot of stakeholders who need to give their approval when you're working with larger companies that are sourcing new ingredients for the first time.
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Chase Clymer
Absolutely. So all roads lead to building your own direct consumer business, and that's obviously a lot of what we talk about here on the podcast.
So as you are shifting gears and re-approaching the business model and you're launching this direct-to-consumer side of the business, you obviously have to make these consumer-facing products that are a little bit different than the wholesale products.
And then you have to get eyeballs on them. And I think that's one of the hardest things that a lot of our listeners do is how do you drive those eyeballs?
Caroline Cotto
For sure. Yeah, we had a lot of barriers up against us. First, this unknown ingredient. Second, what is upcycled food? Why should I care? Are you asking me to eat trash? All of those.
So, lots of pieces to educate the consumer on. And I think what we really figured out was, similarly to giving okara flour or this unknown ingredient to R&D professionals, if we gave it to home cooks they had no idea what to do with it.
I mean, we had a very small subset of Japanese American customers who are very loyal and are familiar with it, from childhood. But outside of that, people are like, what is okra flower? I have no idea what you're talking about.
So we decided to lower that barrier to entry in two ways.
The one way was ready-to-eat cookies. And so that was, we actually originally introduced those in a food service channel so people could get them as snacks in their offices.
And you know, they would have it with their afternoon coffee and say, Oh, this is really good and then drive trial to our website from that. So using on-pack marketing.
And then the second way was through our baking mixes, because we said, you know, there's a lot of nuance with using a pure flour, but with the baking mixes, it's super easy.
And so we use the baking mixes actually as a platform to do a lot of partnerships as well to bring different audiences to our website.
So we partnered with a lot of spice companies or unique vegan chocolate suppliers or unique sugar suppliers as a way to kind of educate their audience about upcycled food and vice versa.
We could use them to bring people to our website to educate them about our products and vice versa.
Chase Clymer
Absolutely. It sounds... You guys have tried a lot and done a lot in building this business over the last 7 years.
Looking back, is there anything that stands out, maybe a mistake you made along the way that you want to help our listeners maybe not make?
Caroline Cotto
Yeah. Definitely. Lots of mistakes that come to mind. I think, you know, challenges on... I think partnerships for us have been both a win and a challenge. I think, you know, we found early success with them, and so we're doing a lot of co-branded marketing and realize pretty early on that, you know, we have to be careful about not losing our own brand in that process and making sure that we still stick out.
So a lot of it has come down to how do we tell that message on our website and on our packaging instead of making simple tweaks, instead of making the logos equal size, making ours definitely the more prominent one and using more of the Intel inside model to have some sort of call out for our partners.
I think we have so many different brand messages, whether it be environmental sustainability, vegan, gluten-free, all of these different things. And so I think one challenge has been, how do we really hone in on what the hierarchy of those messages should be for our consumers?
And what we found was that after a lot of surveying our direct-to-consumer customers, what they care about most of all is taste and premiumness above all else.
And so we've actually recently changed a lot of our messaging and on-pack marketing to talk about the fact that our mixes are crafted by a five times James Beard award-winning cookbook author and that they taste absolutely delicious, the best mix you've had, whether or not it's vegan or gluten-free, and moved a lot of that other messaging into the background.
So for people who really care to do that double-click, they'll find that information, but we're not leading with it as much as we were.
And the other thing is we are leaning hard into the upcycled messaging because that is our differentiator on shelf.
And so trying to figure out how can we really tell the impact side of our story in a way that resonates with consumers.
So building out more robust data on our website for people to talk about, like how much water is being saved and how much food waste is being diverted so that it's really truly a better for you, better for the planet option that you can kind of get behind.
Chase Clymer
Absolutely. Your marketing background really shined with that answer. Can you tell the listeners just the power of interviewing your customers?
Caroline Cotto
Yeah. Definitely, definitely interview your customers. I would say, we thought and if you had asked me, who is the renewal mill customer, I would have said, eco-conscious millennials.
And it turns out that especially for our baking products, our consumers are actually 50 to 65-year-old women who are baking for people in their lives with, you know, dietary restrictions or they have a vegan granddaughter and they don't know what they eat or they know that their Gen Z people in their life really care about sustainability.
Which was surprising to me and definitely has informed how we market to them, you know, through our website. Like those people don't necessarily live on Instagram. They're more of… Facebook users or they actually look in traditional print media.
And so when we're thinking about how do we drive traffic to the website, it's also imperative that we know where our customers live online and offline.
Chase Clymer
That's amazing. Now, is there anything that I didn't ask you about today that you think would resonate with our audience?
Caroline Cotto
Yeah, I think we also have realized what to use the website for and what not to use the website for.
For our business, we do sell into traditional retail as well. And through extensive surveying of our customers, we found that a lot of people like to purchase baking mixes as more of an impulse thing.
Like they have a kids birthday party coming up and so they wanna grab a cake mix when they're in store versus really planning ahead and ordering online.
But we've also found that they love gifting for using our products for gifting.
And so we have done a lot of limited time offering. So we try to release something new every quarter to keep those really sticky customers coming back for those products that they can only get on our website while keeping our core mixes in more traditional retail outlets like Whole Foods and others.
So I would say even if the website, even if direct-to-consumer isn't all of your business, I think there's definitely ways to make it a strategic important part of your business and your marketing strategy at large.
Chase Clymer
Absolutely, Caroline. Now, if I'm listening to this podcast, and you've spiked my curiosity about the products, where should I go to support you?
Caroline Cotto
Yeah. So you can find us at renewalmill.com. We offer all our products there. And then we're also sold nationwide in Whole Foods Market with our flowers and our baking mixes and also on Amazon.
Thanks for having me.
We can't thank our guests enough for coming on the show and sharing their knowledge and journey with us. We've got a lot to think about and potentially add into our own business. You can find all the links in the show notes.
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Until next time!
