Advice Line with Scott and Ally Svenson of MOD Pizza

Hello, and welcome to the advice line on how I built this lab. I'm Guy Roz. This is the place where we help try to solve your business challenges. Each week, I'm joined by a legendary founder, a former guest on the show, who will attempt with me to help you. And if you're building something and you need advice, give us a call and you just might be the next guest on the show. Our number is 1-800-433-1298. Send us a one-minute message that tells us about your business and the issues or questions that you'd like help with. You can also send us a voice memo at hibt at id.wondery.com, and make sure to tell us how to reach you. And also don't forget to sign up for my newsletter. It's full of insights and ideas from the world's greatest entrepreneurs. You can sign up for free at gyros.com. And we'll put all this info in the podcast description.

All right. Let's get to it. Joining me this week are Scott and Allie Svensson. They are the co founders of the Fast Casual Pizza Chain Mod Pizza. Scott, Allie, welcome back to the show. Guy, great to see you. Great to see you, guy. Thanks for having us. Great to have you back. So both of you were on the show uh in the summer of twenty twenty three. Uh you told the story of how you created Mod Pizza and and if you haven't heard it, Scott and Alley were high school sweethearts. After college they moved to London. Scott worked in finance, but then he got bored with it and they decided to start a coffee shop in London.

Which turned into a massive business called Seattle Coffee Company, which they sold to Starbucks and then eventually Seattle, where they're from. And started mod pizza, which today has around five hundred stores. It's it's such an awesome story. I loved having you guys on. Um we have lots to talk about, of course, especially Uh a bit of news around Maud. I know that that recently was announced that Mod Pizza was acquired by uh the Elite Restaurant Group. It's a an investment group. I guess to help avoid potential bankruptcy. And I'm curious, you know, because Mott is such a great business and and was operating as such a great business. What

What happened? Was it inflation? Was it the cost of goods? Was it too rapid Of an expansion that created some of the challenges? Yeah, guy, it's a great uh it's a great question. And I think to summarize We we had um it was a Sixteen year journey for us. And the first um

twelve or thirteen of those was incredibly Exciting. growth filled expansion across the US. We were built as an experience to have on premise. And uh we we entered the pizza industry, did pizza different way.

And then when the pandemic hit, it really forced us to change how the business operated. And it also dramatically impacted our growth strategy. We had been Expanding across the country very rapidly to be a first mover. And then we pivoted very intentionally in about two thousand and eighteen from First mover. Into

market infill. And so we started to fill in all the markets that we were in. Um raised a bunch of capital in two thousand and nineteen to execute that phase of our strategy. And then in two thousand and twenty that basically came to a halt while we move to surviving the pandemic. Yeah. And as we came out of the pandemic, we we made several attempts to get back into growth mode to fill those markets in into

Finish the strategic plan that we had had. Um, and there was just a number of challenges that came out of it, whether or not it was staffing crisis or inf uh supply chain issues or inflation. Yeah. It was the inflationary spike that led to a lot of

price change in the industry last over the last few years. started to manifest in terms of Consumers eating out less or having less occasions, less Restaurant visits. And then we got into a dynamic where we needed to raise capital, which we knew we were going to. It just accelerated it and put us into a position of

of either needing to raise capital or sell the company and we ended up selling. And the good news is Mod Pizza will survive and thrive. Um you've got all these locations around the country and and so Scott, you would you you're no longer the CEO, but uh will you stay as advisors for a short period of time? We uh we're still connected with the company. I think that's a uh

a story that's yet to be told in terms of exactly what role we play or how we might be able to help. Things have changed quite substantially and will continue to change. Uh you know, I'm sure elite um has a uh a vision for where they're gonna take it. It's a concept that people love. It's an experience that people love. But the future will no doubt be different than the past.

Mm-hmm. Well, Scott and Alley, the two of you have scaled two chain businesses, one in coffee, one in pizza. Um we've got callers today who I know have lots of questions about, you know, things like expansion and and building brands. So Um a lot of questions. I'm sure we'll have a lot of uh hopefully good advice for them. Sure. Let's let's take our first caller, right? Good, great. Alright, hello, hello, collar. Please introduce yourself. Tell us your name, where you're calling from, and just a little bit about your business briefly.

Got Raz, Ali, Scott, I'm so happy to be here. Uh my name's Evan Byrne from uh Utterless Plant Based Pizza. Hi Evan. We're located in Richmond, Virginia, and uh we're making the world's best bake at home Vegan pizza. I love it. Okay, cool. So so tell uh tell us a little bit about how you got into the vegan pizza business.

Well, we've uh had a restaurant up until recently, so I can certainly identify with um a lot of the challenges that um that Scott and Allie have faced. This was a pizza restaurant? Pizza restaurant, yeah. Okay in Richmond. In Richmond. Uh had it for about six years. We actually just closed on the sale um last week. Um so thank you. So uh this is a pivot. Um we noticed that we had a huge uh vegan clientele. We actually geared it, you know, in the beginning We wanted to have something be inclusive and have something for everybody. Richmond has a huge vegan community. So um we started offering vegan options and we brought on um someone who was making a l a local vegan cheese um and

They were on our menu and and then every time They were not the most reliable vendor and every time we would be out of the vegan cheese, um, we would notice a a dip in our sales. Um so it's really just really just self preservation. Uh I started kind of reverse engineering it and sort of came up with my own uh version of it and uh it was a lot of tinkering around in the kitchen. We came up with something we were happy with and it just kinda took off and

Uh we've just found that it's a much easier business and uh seems like it's got much more legs than the restaurant. Cool. And are you in grocery stores right now, in l at least local stores? We're in about fifteen stores, um, locally. Uh, so there's some mid size uh health food stores. Uh Richmond has a big market community, so we're in tons of different markets around here. And then we just recently got um some regional distribution in the south east. Nice. Congratulations.

Thank you. And they're frozen. They come frozen. They come frozen, that's right. So it's a cashew based cheese. All the uh we we we make the dough by hand. It's naturally leavened, uh fermented for twenty four hours. We use fresh produce. Um and then we par bake the dough. Freeze it, put the sauce on it, shred the cheese on it, top it.

and then and then freeze it again and repackage it. I love the name Utterless. Um Evan, what's uh what's your question for us today? So I think our qu my question is, you know, we're Richmond famous, um People love our pizza around here, um but How do we expand our

our footprint beyond our local market with uh limited resources. You know, I mean uh AKA money essentially like how do we how do we get our our pizza in the hands of uh of people outside of our local market because generally once they try it, they love it. All right, Scott, Alley, um I maybe answers to to uh Evan's questions or maybe some questions for Evan before we tackle his question. We're big fans of a grassroots scrappy approach to things. Yeah. So this is uh you're you're you're doing it the right way, I think. Yeah, and and congrats on you know, building a restaurant and then pivoting into this. I I love that entrepreneurial

You know, ability to see the opportunity and to pivot. I'm curious with the way you've been distributing the product to date, it sounds like you just got some a a slightly bigger distribution opportunity. Maybe you could share a little bit more about that. Yeah, well it's uh it's uh in the south east, so it's a small regional distribution company called P Ten, who we love. Uh and

You know, this is uh Distribution from what I've learned is kinda chicken of the egg, right? You can't get distribution without these key accounts, but you can't get key accounts without distribution. Um so we feel really fortunate that you know they actually approached us, they heard of us, um And they added us to their uh, you know, sort of repertoire. Um and then also it's fro it's hard to find frozen distribution. Um you know, but

I've uh many times I have cranked down the A C in my car and driven as fast as I can to deliver some deliver some prison pizza. Entrepreneurial journey. Whatever it takes. But anyway, uh you know, they've been great so far. Um you know We are part of a catalog of other products that they offer, right? So so how do we stand out, you know Among those You know, d you know, is it going in person to do events? It to get the you know, the Pizza in the hands of people, um, you know, w how do we transfer the sort of buzz that we've generated in Richmond

You know. sort of dive in it's you know, it's hard to get your name out. So yeah. Yeah, do you do direct to consumer? No, we don't do any mail order or online or Or subscription or otherwise? I think the turn off for us with that was has just been that it's a frozen product, so the shipping cost is you know astronomical. Yeah.

I noticed that you you promote the fact that your vegan meat topping beehive a product that I hadn't heard of, but boy, when I started to go down that rabbit hole They are a real thing and they have lots and lots of like twenty two and a half thousand followers on their uh Instagram, I think. W and they promote a lot of pizza and a lot of product using um Cheese like yours. Have you discussed with them having them help promote

And bring you into their venues where where they are? Yeah, absolutely. I think that that's definitely in the cards. We've been you kinda going through a lot of change, you know, the past couple weeks with the restaurant sale and everything, but um But yeah, that was kind of the thought process when when we got into business with them was like we'll do some co branding. It'll be benefici it'll be beneficial for both of us. They're a really well known company and their vegan proteins are great. And if they endorse your product, I mean that's that's gold. And it looks like Beehive is based, I think, in Nashville. So you know, again, depending on how deep you can build out that partnership. that would there's a logic to possibly, you know, create some presence there with them.

Um and some of these publications when you just do a random search on the best vegan frozen pizza in the country. You know, these publications Veg Out, Veg News. They are they are intensely focused on exactly this and they list a lot of Pizza brands that aren't yours and I would use that as an opportunity. I would contact those reporters and say, I see that you listed these twelve brands as the best vegan pizza. I'm

sending to your office this week um one to try because you need to add a new one to your list. I mean, those are reporters that are already studying this stuff. Yes. Yeah, that's great. We had we did have an article on Badge News that uh just just by chance, so Yeah, that's definitely somebody we should reach out to. Mm-hmm. What one of the things we found in our experience with Mod is that the vegan community

Was strong and outspoken and while while maybe small as a percentage of our overall Uh customer base. They were very influential. And um

You know, a lot of people when they're talking about building a a young emerging brand like yours They talk about Connecting with that core customer, that that community that you can build. Man, that that vegan community is a is a prime one

for you to tap into. And and it does come down to All the things you've talked about. the quality of the product, how differentiated it is. And for your you know uh getting out and as you explore moving into new markets. And my strong advice is

You've got, it sounds like a very strong following in your home market of Richmond. Um I would take advantage of that and make sure that you're kind of leveraging it and moving almost in concentric circles. What's that next market where you can take advantage of the strong following and then move into that next market. Growth is seductive and it's exciting. But man, it's better to do it the right way, be slow and deliberate about it, as opposed to

Be measured. quality growth over growth is a a really important differentiator, particularly for someone like you. Sounds like this is your business, you own it. You have to fund the growth. You have to manage it. And and therefore just being really thought about how you step through those next few chapters. I I wonder if you know you're in Richmond, right? And and let's be frank, Richmond is a small market, right? But but you're you're you're three hours from one of the biggest metro areas and one of the most influential metro areas in the US, right? Washington, DC.

Home of Kava, sweet green. I mean so many brands have really started and scaled out of that city. And it's and it's really been a test market for a lot of these small startups to to grow and to become national brands. And I wonder whether there's a world where You go there and you you go to to to to farmers markets there and you have a a mobile pizza truck and you're making these there. You know, the D Dupont Circle farmers market, it's influential. You just get more attention than you would in Richmond. Sampling, sampling, sampling. Yeah, I think that's I think that's a great piece of advice. Um we haven't really explored the Washington D C market yet. Um It's a little daunting, but uh that's definitely something to consider. Yeah. I agree with Guy.

Th thinking about how what's the bridge from Richmond to the the greater DC Metro and how do you kind of build up to that and and who are those key influencers, who are those key retailers? And it feels like You know, that idea that Ali mentioned of What's the way to get the product in people's hands and into their mouth? Um investing in like a mobile

Uh uh you know, a food truck that you can actually take the product. Would be super cool. Sure. I think I think you know, I've I haven't really explored D C and then mom's organic market is is around that area. So so that's something that you know, I I could see

you know, being having some legs where I can might maybe get somebody's ear there. So that that seems like a great a really great piece of advice. And Evan in the in the retailers that you're currently in. Do you do tasting events? Do you get into the story? Yeah. Because I I I would really Really focus on making sure that the Retailers that are currently supporting you

are being really successful with your product and that you're Nurturing those relationships. Taking that data then on the sell through in those stores to the next retailer. 'Cause that's when you eventually have that meeting with Whole Foods if you have all that data and that experience about how Once you get the product on the shelf and in consumers hands and in their mouth, how it how they respond to it.

That's what that's the the data I think that they're gonna respond to, and that that might be the breakthrough that gives you the opportunity to get into that one store and then eventually more. But making sure that those retailers that you're in, it's so easy. Again, this gets back to the conundrum of growth. Once you focus on growth. then your time and effort and energy ends up being focused there as opposed to in your core business. And Yeah. Making sure that's always a struggle. That's attention. In a small business like yourself. Where it It's really you getting pulled.

Making sure that you're not neglecting those current retailers and making sure that they love you and that they they're big advocates because That's what's gonna feed The the reputation and the demand then for the product going forward. The most powerful marketing you have is getting your product into people's mouths. Gorilla Pizza Drops. Yes, exactly. Yeah.

Awesome. The brand is called Uterless. Evan Byrne, uh congrats on launching this. Good luck, man. Thanks so much, Ellen. I appreciate it. Nice to meet you. Nice to meet. Good luck, Evan. Thanks. Fine. Uh I'm I'm not eating pizzas very often now'cause I'm on this annoying diet, but I do love it. As you guys do. You love pizza. But you we can't eat it every day. It's going you're right. You just Although maybe I shouldn't say that, because we want pizza people to eat mod pizza every day. Sure.

Yeah, no, I mean and and he's right on it. I mean, health, lifestyle, uh, diet, those are such powerful trends and And if he can develop a really cravable product that caters to that very strong and vocal community, man, that's a that's an exciting place to be. How d how did you guys do with vegan p pizzas? Because you uh presumably did you have a vegan cheese option or was it just like cheeseless. Yeah, you did. We had a gluten free and a cauliflower crust option, and then we had vegan cheese. So we had a lot of Strong customer following from people That had dietary restrictions or preferences. And by the way, that all happened very organically. We did not market that. We did not push that. So it was wonderfully surprising for us. Right. And once they discovered it and made modest solution for their vegan needs, they were big promoters of it to their community. And that's why I think

in in talking with Evan and really getting you know, making sure that he is um very close to and building that relationship with the with that community is just key. Okay, next up after the break, another caller with another business challenge. I'm Guy Raz, and we're answering your questions right here. On the advice line.

On how I built this lab. Welcome back to the device line on how I built this lab. I'm Guy Roz, and my guests today are Scott and Allie Senson, founders of Mod Pizza. Uh, Scott and Allie, let's let's say we take another caller. Hello, collar, welcome to the show. Hello, how ya doing today? Hello, hello, please um introduce yourself, tell us where you're calling from and uh just a little bit about your business.

I'm Zebbie Carney. I'm the owner of Eugene's Hot Chicken. I'm calling from Birmingham, Alabama. Hey, Zebe. We are a hot chicken restaurant, uh catering company and food truck. We started in 2015. Um we got two restaurants and three food trucks and we got two sauces in couple of local stores here in Burnham, Alabama, and we're looking to expand. says I mean tell us how you got into the restaurant business and and how you came up with this idea. Yeah, so I'm originally from Nashville. The home of hot chicken. Nice. I've been in restaurants uh since I was sixteen. Twenty seven years I've been in restaurants. I kinda worked my way up through the restaurants. I went back to school to get my bachelor's in business.

Um Yeah, it was no hot chicken in Birmingham and it was it's such a incredible food town. And I was um you know, kinda tired of corporate America and I was just looking to do something else. I always wanted my own little restaurant. And I was just trying to add value to the great food scene here in Birmingham. And you know, I was like, hot chicken was perfect. So I started doing pop ups. They became successful. And then I purchased a food truck.

And we just kinda grew from there and it's all been organic growth. You know, we went you know, we kinda outgrew our connoisseur kitchen we was working in. So then we opened up a restaurant and the restaurant just kinda took off from there. Wow. Nice. Oh. Uh Zebi, um tell me about the name Eugene. Who's Eugene? Oh, so Eugene's my father's middle name. You know, he passed when I was seventeen years old, and just a way to honor him, I named the whole company after him. Plus Eugene's had that old school southern name to it that I wouldn't get at with Zebbie. Are the are these his recipes by any chance? No, they're all my recipes. I created them in our apartment. Wow. Amazing. I'm I'm looking at your menu. It looks delicious. I can't wait to dive into to a little bit about your your process. Tell me about uh your question. What's what question do you have for us today?

Yeah, so you know, all of our growth has kind of been organic growth. Um but you know, we're looking to grow more as more brands come about. How do you handle Um fast growth and how do you scale? Right. Just a few thoughts on that. Got it. Okay. We'll get your question in a moment, but before that, uh Scott Ellie

Any questions for for Zebe? Yeah, and and congrats. It sounds like you've had a lot of success. And man, you are in a really good space. If you were to look across the restaurant industry over the last five years, and I'm sure you know this. Being in chicken and chicken sandwiches, there's no better place to be. Massive. You've seen all the what's happened with You know, the different brands who brought in chicken sandwiches and it just seems like the you know, that as long as we don't run out of chicken, we're gonna be uh you you'll be in good shape. We just a added a vegan chicken sandwich to the menu as well. Wow. There you go.

Um So I take it that you've financed all of this and and this is all company owned uh today. Yeah. I have and you know, that's one issue with with growing, you know, like Yeah for sure. I don't want to stretch us out too thin. Yeah, well congrats. I mean that's

It's commendable that you've done it all on off off the back of, you know, your own hard work and and incrementally grown it. Um and right now you are just in um Birmingham, that's right. Uh the three the two stores and the three food trucks? That's correct. Yeah, and and so I take it that there is a desire to want to take this great menu, this great brand you have, and grow it. Yeah, so we bought a new uh new food truck this year which we call a travel truck and we just been traveling different markets. We just got back from Nashville for four days on Sunday because if you're gonna do hot chicken, you gotta do it in Nashville. Plus it's a bigger market and you know I feel like we can scale quicker if we get to Nashville. So we've been taking our food truck there.

Great way to test it too. Yeah, and it's been great. So Zebbi it's funny you're smart uh you're smart because my first piece of advice was If you're gonna test new markets, you've got a food truck, it's mobile, it's a low cost way of getting the product in people's hands and seeing how they respond. And it sounds like you've done that. So You've done it in Nashville, have you done it anywhere else? We've been to Atlanta, uh we've been to Nashville a couple of times. Yeah. We got a a hot chicken not a hot chicken, a fried chicken festival coming up in New Orleans in October. So I'm pretty excited about that one.

And the response from uh customers in Nashville and Atlanta was positive? It was real positive. You know, people tell'em it's great, but it's a little bit different. So that's awesome just to hit it,'cause we're not like anybody else. You know, at Shell's background then. Yeah, that's just background, you know, and growing up with hot chicken, I want it I don't want it just hot. I wanna add more flavor to it, you know. And it's been it it's been great. What's the population in Birmingham?

Ah, roughly, if you add in the suburbs, uh it's thirty three municipalities, I say around a million people. So The first thing that I would ask you to consider is You know, i in our industry there's a There's a formula.

That is, the more penetrated you are in a market, the more well known your brand. And generally the brands that are more well known perform better. So Making sure that you really feel like you've before you move into a new market that you feel like you've really taken advantage of your home market.

Yeah. And I don't know. I would tell you in a market with a million people I would be surprised, Ebi, if you couldn't have Ten or twelve or maybe even fifteen points of distribution, whether it they're food trucks or or stores. And I'll tell ya, it's exciting and it's seductive to go to that new market.

But man, it it does bring A whole series of challenges and complexities. That at the right time are worth taking on. But man, before you've really maximized the opportunities in your home market, I would just Strongly encourage you to

to to do that first and then with a really strong foundation Then think about okay, how do we want to extend into a new market? And then there's all types of questions, Zebi, around How much risk do you want to take? Uh meaning do you want to do it all company owned, meaning you're going to continue to finance it all?

Bring in partners, do you want to franchise? And and this is another challenge with growth. As soon as you start focusing on growth, particularly if it's in a new market. You gotta travel, you gotta hire people, you gotta bring it up. Now you're not focused on your core business, you're focused on the growth because there's only so many hours in the day.

And that's when people get into trouble because now as opposed to focusing on how do I elevate How do I manage my costs so that I can keep my prices where they need to be? How can I take care of my team so they're delivering a great experience? You start focusing on the fact that well, I had a general manager in Nashville and they left and I gotta leave. I gotta go to Nashville for two weeks and I gotta stay in a hotel and that's gonna cost me a And it y you just

you end up changing your priorities and your focus. And so um, man, I I I think the more you can really own that own your home is a is a mantra that a lot of people in the in the industry talk about own your home, build a fortress because If you can become the loved local бран. And Birmingham and and if you end up having six, seven, eight, ten locations

There's a a loyalty that develops. You know what those iconic local we have many we have several of them here in Seattle, which have been around for fifty, sixty, seventy years and the value of the brand is almost more now than the value of the business. Then you can decide to do anything. You can go franchise it, you could grow into a new market, but you're doing it from a really solid f foundation, or you can just build it up. have a really easy business to run.

And then eventually sell it as this iconic local Birmingham institution. Zebi, quick question on the you mentioned that you have sauces that are that are distributed in groceries, so that's a huge deal. How how did that come about? Yeah, during Covid, you know, we were just in looking for another way to pivot and we we know we're a scratch restaurant. We wanted a few fast cats or scratch restaurants. And you know, people they love that comeback sauce and they love that white sauce. And I was just figuring out uh what else could we do with it and you know, we end up bottling it and putting it in grocery stores. So right now we're just They doing well with a few local or piggly wiggly's, but that's another thing, trying to figure that out. You know, I haven't really I'm trying to get somebody else to kinda take care of that part of the business while I still focus on growth though.

The restaurants. Yeah. And but you know, how do we handle that growth and that skilling? You know What Key performance indicators. Uh uh do you look for the measure success?

Yeah, it's I mean it's a it's a great question. I mean I'll give you a few which are pretty typical in our industry. The first is average unit volumes. Everyone wants to know what are your AUVs. Secondly, is your store level contribution How profitable is the store? And that's gonna be obviously a byproduct of Where are your costs to good sold? Where's your labor and all and your occupancy costs and then other operating expenses?

And people want to see that a couple of things. That your revenue is at least two times Your Cost. To build and open a store, your capital cost.

And ideally closer to three. But at least two times. So if it costs you half a million dollars to open a store, they want to see it at least m a million to a million and a half in revenue. And then a twenty percent store level contribution. Um store EBITDA, store profit.

um is is is a really important marker. Sometimes people are in the high teens. Best in class brands, Chipotle and Kava and and others are In the Mid twenties.

Um so being at that twenty percent level or higher is really important. And then frankly. The other key metrics that you gotta keep track of are how your customers feeling about you, all of those, you know, the customer feedback, how's your your team feeling about you? Because you know turnover is expensive. both in terms of cost to hire people, train them, as well as just the experience they deliver. So

I'd say those are probably the most important metrics to track. Yeah. Thank you. Uh, Zebi Carney of Eugene's hot chicken in Birmingham. Thanks so much for calling and good luck. Thank you all so much for having me.

Yeah, congratulations. Good luck. I just I love a fried chicken sandwich, I gotta say. He's in the right spot and uh he's been doing it for a long time. So he clearly he he knows what he's doing and he's built clear Developed a product that people love. Yeah, and you just see in the last as you mentioned, the last several years, you know, raising canes and uh obviously obviously um uh Chick fil A and

I mean, even the chicken sandwiches at Popeye's I mean they're they've just i it's exploded. I mean you see and and the Dave's hot chicken, you see these other chains coming up, uh I mean that that category is just It's just exploded. Exactly. Alright, we're gonna take another quick break, but we'll be right back with another caller. Stay with us, I'm Guy Roz, and you're listening to the Advice Line. Right here on how I built this lab. Welcome back to the advice line on how I built this lab. I'm Guy Raz.

And uh let's go ahead and take another call. Hello, welcome to the advice line. You are on with me and Allie and Scott. Hello, who's usus. Hi everybody, I'm Christiana. How are you? Hello, Christiana. Welcome. Tell us uh where you're calling from and a little bit about your business. I'm calling from Los Angeles, California, and I'm the founder of Valor Bebidas. Uh Valor is a tequila company that's committed to

really creating a brighter future for the tequila industry through fair and sustainable practices, both for the people and the natural resources that bring this beautiful spirit to the world. Mm. Cool. How long have you b when did you start the business? Um we formed the corporation in May of twenty twenty two and launched the product in July of twenty twenty three. And you're making it in the United States or in Mexico? Tequila is just like champagne, in order to be called tequila, it has to have yeah, a designated region and ninety five percent of tequila comes out of the state of Jalisco. And then there's a few other municipalities within the country of Mexico, but yes, we produce out of the town of Tequila in Jalisco.

Which is where the name Tequila came from is actually the town. Cool. Well tell me a little bit about your background. business for a long time. I've no not at all. Uh my background actually is in corporate responsibility and sustainability. Um I worked for the Walt Disney Company for seven years, leading our environmental and science education portfolio across the enterprise. And then I went to a environmental nonprofit in DC And then in twenty nineteen to start decided to start my own uh company called Do Gooderie, where we consult with major corporations like Amazon and Disney to help them be better corporate citizens. Um and then one of my mentors said, You know, Christiana, you spent your entire career helping companies Try to do better, maybe it's time for you to start your own company so you can model what it looks like to create a responsible company from the very beginning. And and how did you land on tequila? Which by the way is the only spirit I'm drinking now because it doesn't spike blood sugar. Yes. At least for me. Yes, I'm so excited to hear that. Uh it really does. It's amazing. I just had some last night'cause all my friends were drinking whiskey and I can't drink it.

Tell me how you decide to get into tequila. So uh I am the daughter of immigrant parents and so I spent my time as a kid living between California, El Salvador, and Mexico. And tequila was my very first drink in fourth grade. My sisters Wow, in fourth grade. And my sisters get so mad at me for telling the story because they're 12 and 13 years older than I am. It was just a little sip of a margarita, but Tequila has had a really special place in my heart since I was little. Appropriately little. Um but you know. I grew up with a family, you know, that sort of always took care of people and being in growing up in developing countries like El Salvador, you know, you got to understand like the deep disparity in labor. And so tipping and taking care of people was always a really important ethos to our family. And I was in in Mexico for a new year's trip and learned a lot about tequila and the real inequitable practices in the industry. It's a multi-billion dollar industry. It's one of the most labor intensive industries in the world. But the moneys up here, the money in the UK, and it doesn't go back to the people. So I came back and it's also really exploitative in terms of not the people, but also extractive for the investment.

environment. So came home and I said, you know what? Tequila. That is what I'm going to do and I don't know, one door just kept opening and opening and opening and opening, it was just kind of a natural thing. Amazing. And and tell it tell us well, what your question is. Yeah, so uh Ali and Scott, I listened I did a lot of research on you guys and I listened to your how I built this episode. I was in tears like nineteen times. I'm like

They put people first, they were able to do this and you know,'cause there have been so many times where I'm like, Am I insane? Like is this crazy to think that we can do this? And you know, people Are demanding more and more that companies be more responsible, but not quite yet at a higher price point. And so how do we get consumers to demand more of companies like ours and everybody? Because supply chains rarin here in the US, but we get to benefit from you know, inequitable labor practices all around the world. Yeah. Um Scott Alley we can you can answer the question or ask your own questions. Um please

First of all, congratulations. What you're doing is really exciting, cool, and it's so authentically I d I just love that your mission and your purpose is just so fundamental to why you're doing what you're doing. So that's really great to hear. Is any other tequila brand in the world? Uh focused this way. No. Great. Okay, great. That was my question. Yeah, and and I would just say uh first of all

Congratulations. I love the story and I I just popped onto your website. Dedicating ten percent of sales is not trivial. I mean that is a serious commitment. Serious. I would I would suggest that you are taking the position of building a company in order to Promote these

Which is spectacular. Our journey with Maud was similar. Um different but similar. And um you know, I think a lot of people try to wrap social impact and and you know being a good corporate student or st and and dedicate

teeny little bits of resource. And try to get the benefit and it feels like you're doing exactly the opposite. Yeah. What's your price point? So our Blanco is seventy nine ninety nine retail and our reposado is ninety nine ninety nine retail. Which by the way, when we launched it was uh one nineteen for the blanco and one thirty five for the reposado, but we just we pigeonholed ourselves by doing that. So we took a big plunge and we're actually getting ready to do another price drop. I'm sort of taking the Uber approach where, you know, we'll probably break even with this next price drop, but for us, like velocity and just getting this product in front of people is really important because that's our biggest that's our biggest roadblock is price. Mm. Ally and I'm curious. I mean,

And and I I'm I'm gonna play a devil's out of kit here for a moment because I think that the ten percent is incredible. But I wonder whether again, we talked about this with Maude, you know, whether consumers ultimately care about that to the point where they're gonna choose that product, right? Because I mean there are co I I think about the coffee industry and I know La Calombe and a lot of a lot of other coffee brands do a a version of this where they really focus on sourcing and making sure that they're buying it from the farmers. I'm not convinced based on my conversations on the show and and around the country that consumers

Right. And and so I wonder whether There is a that approach is is really the way to to sell the tequila. Yeah, so I I would just offer That first of all Christiana, I we totally applaud you because I I do think as you said that consumers

are starting to become more aware and are starting to appreciate Good corporate citizens who are Building businesses the right way. But I agree with guy. I I think you are in the vanguard, you are a pioneer.

And And and I don't think consumers yet are necessarily voting with their pocketbooks the way they do with their conscience, the way that they might talk about it. Now That's not to say that you can't be one of the pioneers that prys it open and finds a way. And Guy, you gave a few examples. The one I would offer is Tom Shoes.

And so um Tom's that one for one model. I Do and then Allie could speak more articulately about this than I, but I do believe consumers at the time when they went in to buy that type of shoe And I do think you have a similar opportunity.

It all comes back. Though to the product. People have to love your product. And and you're selling a premium product, so you're selling it to people who are maybe not quite as as price conscious or as price sensitive as others.

And I do think if you can find a way to communicate with them, educate them, and get into their conscience that This is not a matter of you just having a token, you're giving ten percent of sales. I think a key word uh is education because I I have to gosh, ideally you almost want to find some journalists or a publication. You you need people to help um do some sort of an expose and help educate us as consumers, our country around this this industry and the and the practices that either are good or bad

Because as soon as there's more discussion or education around it then people will ask the question, Well, who is doing it, right? What are my options? And if you can get people asking those questions you're going to be the only one standing there saying, I can I I I'm doing it. And so education in as much as you can help educate people, I think would be huge. I might also suggest that you study um Starbucks and what they did years and years ago and

uh when people star nobody knew anything about people knew they liked drinking Starbucks coffee, but nobody knew anything about ethical sourcing of coffee beans. We no nobody was talking about that. And I think Starbucks did a phenomenal job years ago starting to help us consumers racing in, getting our latte, and they started to see bits of information and education in there. In their locations, but that started to discuss this. And I think that can help get people

um made made more aware of what really the issues are. That's where you gotta get it to the point where people are asking or curious and boy, you're you're then you're the person to have the conversation with. It feels like there's an opportunity as well. If if You know, this is a a type of product and it's an industry in particular where Influencers and people who are influencers. I'm trying uh

uh the name of the brand that was started by um The the famous movie star that that's gone out of my head. George Clooney? Yes. Um Casamigos. Casamigos. Yeah but there's a great example of a product that blew up Um because of that That

affiliation I would be surprised if you couldn't find some very very influential influencers who would buy into your mission and buy into maybe partner with you to say, we're going to get this story out. We're going to help you promote this brand in a way that's much more efficient than just buying marketing or what have you, or media. Um, that's the type of thing that's gonna just elevate the the brand, elevate the story, and start to trickle down this message that

Hey, this is a brand that's doing things differently. A lot of people love tequila and And I think That then diagram of people who are Loving tequila and who are love the fact that you're doing it differently. And

And obviously ultimately you need to love the product. Right. Uh I I'm gonna just I'm gonna push back a little bit, I think that all of that advice is really sound. But there's one thing that I still think is important, which is the product. And from what I understand looking at your website, uh Christiana, it's is that You g there's something slightly somewhat unique about your tequila, right? It's mature agave and water and that's it. Nothing else. Really clean.

Very clean. I would push that because because, you know, uh the the the mission side is gonna be critical and you're gonna be pushing that and you're gonna be explaining that. But uh but the flip side is You know, you want people like me who are ha who are on keto diets who want to have a drink, or people who are going to CrossFit gyms, or people who are going to Orange Theory who want to have a drink and and and you know, not uh nobody should drink in excess, but I'd love to just to you for you to double down on that clean Mature agave plus water. Something that really evokes this idea that that this isn't just another tequila. This is the one you should go for. And who are the most high end bartenders these days that are, you know, introducing people to the the the best of the best? You want them to I mean, if the product is so great and it's so clean and it's

Helping build community and solve real problems. I mean, that's a wicked combination, and if you have bartenders, you know, the ones that people are writing articles about or people are building concepts around, making sure that they are your your ambassadors, I think would also help because so much of it, I think does come down to education. People just don't know. Until they know. And that's a big job. You can't do it on your own.

I also think there's an opportunity you probably are already doing a version of this to really push us with women. Yes. Being a women owned brand is is something to to trumpet as loudly as you can. Um You know, I think about the Avaline the wine, you know, with Cameron Diaz's brand. I think people really respond to that and and you can have your your version of that. I think consumers are open to it and respond very well. But it's a matter of just getting out there for them. Yeah. Oh gosh, you guys, thank you so much. This is all you guys are amazing. Um, you know, we are a very tiny brand. We don't you know, we're actively going to actually raise real capital now because to do all of this it takes so much. money and unfortunately bartenders, a lot of them are pay to play now and influencers. And I get it. They have to make their money, right? We just don't have like we're too busy. We say ten percent of the bottom, like

Nine hundred percent of the bottles are going to the work that we're doing right now until we get this work off the ground, you know. So it really is like our advocates that have been wonderful and haven't charged us to promote us and Walt Disney World actually brought us in and we're the first female additive free brand for Disney ever to use congratulations. That's cute. Thank you. Yeah. It's um it's been an exciting it's been an exciting ride, but I I'm not joking, when I listened to your um episode I I felt very hopeful. Mary Hope. Very, very hopeful.

Awesome. Um Christian Martin's the brand is called Valor Tequila. Congrats. Keep us posted. Uh we're gonna we'll be following you. We will be watching guys. Yeah, congratulations and best of luck. Thanks so much. Take care. Bye. There seems to be a theme from almost all of the entrepreneurs that we got to talk with today. they're all at the right time in the right place in terms of a product or offering something that is right now sewing, whether it's you know, chicken or you know, just the the vegan movement.

Tequila, you know, the time is now. It's it's very exciting and um I think there's a lot of we can be very hopeful for all of them. For sure. We can have a great meal. Yeah, I think. We could for sure. I would go. Scott Nally Spencer

Co founders of Mod Pizza, thank you so much for for joining me on the advice line. It was great to have you guys back on the show. Thank you. Yeah, great to see you again and and great to be a part of this. And by the way, if you haven't heard Scott and Alley's original How I Built This Episode, You have to go back and check it out. You can find a link to it in the podcast description. And here's one of my favorite moments from that interview. We had never worked in retail.

Our qualification was the fact that we had been customers of the thing that we wanted to create. Yeah. It's interesting. I think one of our strengths at the time was the fact that we didn't know what we didn't know. Mm-hmm. A friend joined our board. Early on and

The week before our first store opened, he said Listen. I decided to do this because I really like you two. And I wanted to make the process of failure less painful for you. Because this is never gonna work.

Thanks so much for listening to the show this week. Please make sure to check out my newsletter. You could sign up for it for free at gyras.com. Each week it's packed with tons of insights from entrepreneurs and my own observations and experiences, interviewing some of the greatest entrepreneurs ever. And if you're working on a business and you'd like to be on this show, send us a one minute message that tells us about your business, the issues, or questions you'd like help with. and hopefully we can help you with them. And make sure to tell us how to reach you. You can send us a voice memo at hibt at id.wondery.com. or call us at 1-800-433-1298 and leave a message there, and we'll put all this in the podcast description as well.

This episode was produced by Catherine Seifer with music composed by Ramtina Rablui. It was edited by John Isabella. Our audio engineer was Cina Lafredo. Our production staff also includes Alex Chung, Carla Esteves, Chris Massini, Devin Schwartz, Elaine Coates, JC Howard, Carrie Thomson, Neva Grant, and Sam Paulson. I'm Guy Raz, and you've been listening to How I Built This.

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