#129. Michel et Augustin is a French confectionary brand that entered the U.S. market in 2016. We talk with Evan Holod, the CEO of U.S. operations, about the challenges of making a popular French cookie resonate with Americans. The Loose Threads Podcast features in-depth discussions with leaders across the rapidly changing consumer economy.

Check out the full transcript below. 

Evan: [00:00:01] America has never adopted French food at all. No one goes to French restaurants. The t’s don’t sound like t’s, the u’s sound like weird things, the r’s don’t make sense. We’re so afraid of it that we abandoned it.

Richie: [00:00:18] That’s Evan Holod, the CEO of Michel et Augustin USA, the American offshoot of the renowned French confectionery brand. Evan joined the company after it had tried and failed to enter the US market, which has a range of different dynamics than the company was used to in France. With his background from Coca-Cola and Glaceau he has led a re-imagining of the brand over the last two years to make it a staple in the American pantry.

Richie: [00:00:46] I’m Richie Siegel, the founder of Loose Threads, which analyzes and advises next-generation consumer companies, and FaceLift by Loose Threads, a retail incubator and accelerator for leading brands and retailers. For our latest analysis and insights check out our free weekly newsletter at LooseThreads.com. We also announced Loose Threads Live, our invite-only and entirely-off-the-record gathering for founders, executives and investors on October 3rd in New York City. Learn more at LooseThreads.com/Live.

Richie: [00:01:10] I started the Loose Threads podcast to spark engaging discussions with leaders across the consumer economy. That’s why I was excited to talk with Evan about how he harnessed the company’s unconventional approach to marketing into a repeatable and scalable business built on US soil. This is one of the more fun conversations I’ve had on the podcasts in recent times. Here’s how it all began.

Evan: [00:01:35] It’s always interesting to talk to people about me Michel et Augustin because, when you go to France and experience it—which I did for the first time when I started talking to them about taking this position—you realize that this company that I’ve never heard of before is an absolute sensation in France.

Richie: [00:01:55] Why is that, you think?

Evan: [00:01:56] They’re like Ben and Jerry over there, and if I had a dollar for every time I said to someone, “They’re the Ben and Jerry’s of France,” I’d be rich. But they’re more than that, because they’re across multiple categories. So, we’ve become kind of accustomed to entrepreneurship in the US, starting back decades ago in multiple categories. But even in food, you know, going back to the 80s, where you started to see things like Sam Adams and, you know, that has moved into, like I said, Ben and Jerry’s. And now we’re obviously in the midst of just an incredible boom in entrepreneurship across every category and there’s so much money coming in.

Evan: [00:02:34] Well, that isn’t necessarily what’s happened around the rest of the world. And, obviously, some economies that are not built to encourage that type of entrepreneurship, and we all know how we talk about the European Union and other economies that are a little bit more socialistic, perhaps, and don’t have quite the tax incentives and things like that, or the labor incentives. And France is one of those countries that has historically not had that type of incentive for entrepreneurship. Well Michel et Augustin really didn’t buy into that, or they didn’t let that keep them down. And so, when they started this business back in 2003/2004 they didn’t take those lack of incentives as a barrier. They pushed themselves through and they still remain to this day one of the few successful entrepreneurial businesses that’s actually made it there.

Evan: [00:03:27] And so, people still look to them as this unicorn. You know, we use that word here to describe, you know, the billion dollar—and we’ve seen tons of them. You know it’s, “Who’s gonna be the next unicorn?” Well, they are still the unicorn over there that people look to and go, “Oh my god.” It’s rare. It’s amazing to see one in real life. So for me it was, going over there and seeing them and seeing the way people treat them and the way people look at them.

Evan: [00:03:53] Every year a survey comes out amongst the graduates of one of the top business schools over there, “Which companies do you want to work for in France?” And even though Michel et Augustin is about a $50, $60 million-dollar-in-revenue-business every year, they’re always in the top three companies that these business students want to go work for when they graduate from business school. So it is this icon over there, and I’d never heard of it! You know, it’s this crazy, like, could you imagine if there was a company in the US that was the number three company that everyone graduating from Harvard Business School wanted to work at, and people in Europe had never heard of it? That would be like never hearing of Google.

Evan: [00:04:32] So, you know I went over there and I saw this thing and it just blew my mind and I realized that I had to learn more about this thing and I had to find out what the secret sauce was.

Richie: [00:04:43] What is, I guess, this thing? In terms of, what do they sell, where do they sell it? Kind of that high-level background.

Evan: [00:04:48] So, they are food entrepreneurs who have basically decided that food should be fun. That French food should be approachable and that French food should be made with good quality ingredients. And they have gone out and they have basically redefined multiple categories right now in France. They started out by making what we would call cookies—over there they call them biscuits. So, Michel et Augustin started by baking short breads in their kitchen in Paris. They thought it would be simple. 300 tests later, 300 shortbread tests later, they came out with their first recipe. And it was good. Wasn’t perfect. It wasn’t about necessarily using the best ingredients, it wasn’t necessarily about being organic. It wasn’t necessarily about being vegan. It was about using ingredients that you could find in your kitchen. And it was about making just good quality products, and doing it in a way that was transparent, doing it in a way that was open to the community, inviting people in, and letting people be a part of the experience.

Evan: [00:05:51] And since then, they’ve moved on and brought that same approach to the dairy category, introducing one of their most popular products, which is called the vache à boire, which is literally a translation of “drinking cow,” so it’s a drinkable yogurt. But, you see, that sort of same transparency comes through into the way they define and talk about the products. “A drinking cow,” that is literally what it is. Moving into things like fresh desserts, the chocolate mousse is an absolutely amazing product. I will tell you, the first time I went over there they left some for me in my hotel room. I ate it for breakfast, lunch and dinner. I’m not exactly sure that’s what the serving sizes were for, but American serving sizes and French serving sizes are extremely different. Those were family sizes it turns out, I thought they were single-sizes. So, another thing that I’ve learned since I’ve started traveling to Europe a little more. Good to know.

Evan: [00:06:47] Since then, they’ve also expanded into ready-to-drink teas and lemonades, savory crackers, and now they’ve also got a line of vegan products and all that, since Dannon has made their investment into the company. So, they’ve expanded across an incredibly wide range of products right now and they’re still really at the vanguard of sort of the food scene, in terms of France, and have expanded now into distribution across most of Europe.

Richie: [00:07:10] In Europe, distribution-wise, where it is distributed? Whether it’s wholesale distribution, their own stores etc.

Evan: [00:07:17] Across retail. And the retail scene in Europe is significantly different than what we find here. How different? Er, explain.

Richie: [00:07:24] Channels. You know, you’ve got a very strong grocery channel but you have much different players. You know, you’ve got your Carrefours and you’ve got your Monoprix, and—it’s big players, there are fewer of them, they have more collective power—

Richie: [00:07:38] Less regional than it is here.

Evan: [00:07:40] Yeah. And definitely, though, then you have less channels of distribution. So you don’t have an active drug channel when it comes to food and beverage distribution. The drug stores over there sell health and beauty and pharmaceuticals, the convenience chains are offshoots of the grocery chains. You don’t have an active club channel. I think in France, if I’m correct, they have one Costco. Amazon is an emerging power. There isn’t a Walmart, they don’t have Target.

Evan: [00:08:07] When you think about cross-channel, when you think about omni-channel, when you think about all the things that we spend so much time worrying about over here in the US, and then you go over and you talk to them—and I remember as I was going in and pitching my business plan and thinking about all the things that I was putting together as I was interviewing, and I was talking through all the big plans I had for them. And [I’m] sharing this stuff and I realized, as I was kind of halfway through, I was like, “I’m pitching solutions to things and I don’t think they have these problems. I think I’ve gone too fast too quickly.”

Evan: [00:08:43] And so, it’s just a very different scene. The distribution models are very different, and even things that I didn’t realize coming from larger companies—things like broker networks and the way distributors work and all that—it’s just a very different scene than what we face over here on a day-to-day basis.

Richie: [00:09:02] Talk a bit about then, why you think Dannon acquired the company, and then also kind of what was version one of entering the US and how that turned out.

Evan: [00:09:11] Dannon’s move is, I think, two-fold. On the one hand Dannon in creating this Danone Manifesto Ventures group is obviously looking at the same types of things that all of the large and smart CPG companies are looking at, which is the need to fuel growth by finding these great entrepreneurial brands, and fuel their pipeline with great businesses. Nobody needs me to sit here and try to explain why big companies are trying to invest in great small companies. That’s pretty much been explained at this point. I think Michel et Augustin makes a lot of sense because of what I said: Danone is an iconic French brand, one of the truly great businesses in the world. A real leader, in France, especially, and in Europe. Michel et Augustin is an iconic up-and-coming French brand, and is an iconic French brand today, but it really punches above its weight right now in terms of the reputation and its brand image versus its sales today. And I think when you can put those two things together, it just makes an incredible amount of sense.

Evan: [00:10:18] What Danone can bring to Michel et Augustin in Europe, and in France, in particular—I can’t imagine what the next few years is going to look like there. This is gonna be an absolutely incredible expansion for the Michel et Augustin brand. And then when you think about, you know, globally, this brand is going to be massive, and I think the US is the test market. The US is the proof-of-concept market.

Richie: [00:10:42] The company entered the US once before, correct?

Evan: [00:10:47] [The] company entered the US back in 2015. One of the early employees of our adventure, ’cause we don’t talk about Michel et Augustin as being a brand. I’ve used the word “brand” a few times, but the word “brand” is a forbidden word.

Richie: [00:11:03] Why?

Evan: [00:11:04] Because it’s, along with a few other words, it’s too corporate. I’m corporate, okay? I spent too much time at Coca-Cola, I worked at Merrill Lynch, like, I worked at a bank. I went to Duke University. Like, I’m a corporate guy, okay? I’m wearing a buttoned-down shirt right now, okay? I drive an imported car. I’m a corporate guy. But Michel and Augustin are not corporate guys.

Evan: [00:11:29] I’ll show you the picture of the two of them, like, you know, moonwalking nude through a supermarket in France. So we don’t use words like “brand.” We talk about being on an adventure. We talk about our tribe, not our employees. We don’t have an office, we have a banana farm. I mean, we literally have banana plants in the banana farm, and there’s a reason why we do that. There’s a mythology behind everything, and there’s a method to the madness in all of it. But this idea of the adventure, oftentimes it has that feel to it.

Evan: [00:11:59] And so, back in 2015, one of the early employees, one of our truly great salesmen, came over with two suitcases. He established and found a space in a WeWork, and that’s where our adventure started here. And didn’t know anything about, you know, the US market, really. Didn’t really understand, like I said, the distributors. Didn’t really understand brokers, didn’t really understand the channels. Had a bunch of product in suitcases and just started trying to figure it out. There were some amazing successes that came from it, and some absolutely amazing learnings. And some—

Richie: [00:12:39] What were some of those?

Evan: [00:12:39] So, some of the distributors that we found are still partners of ours today. So some of the local distributors that we found are still people that we continue to do business with today. And some of the products that we sold—our buttery shortbread cookie squares—are the product[s] that we still carry today. They’re the product that is being sold in at all the retailers who are carrying us, they’re the product that’s carried on Delta Airlines. Those are the products that are being sold today. So that product was proven out by that first experience. But we also were able to test a lot of other products. So we tested two or three other lines of cookies, we tested some lines of savory crackers, and we were able to see what didn’t actually stick. So we got some good learnings there.

Evan: [00:13:20] We were able to work with some partners who proved to not necessarily be the right partners for us. But, we got into Starbucks. I mean, there’s an amazing story. We were able to get called in in an RFP for Starbucks, and somehow you get selected in, there’s a thousand brands that get called in, and they just want you to send samples. Okay. Well Michel and Augustin get an email that says, “Please send samples.” They don’t just send samples, okay, because these guys are crazy, you know. And I’ve worked for crazy people before, and I’ve, I mean, I’ve worked on the New York Stock Exchange before, I know crazy people in that world. I’ve worked at Glaceau, I’ve seen crazy people in that world. I know crazy, but these guys are crazy.

Evan: [00:14:05] So when they get a call to say, “We’d like some product,” they start filming, first of all. So they immediately start creating content. “We need to get product to Howard Schultz. What are we going to do?” So they create a web series, all of the sudden. “We need coffee with Howard. How are we going to do this?” And it’s in French, and it sounds much more beautiful and entertaining. And then they immediately start getting their French fans to start tweeting to Howard Schultz. “We’re coming for coffee. We’re coming for coffee.”

Evan: [00:14:38] They get two of their comms people to immediately book tickets to Seattle for the next day. They’re gonna fly out there with the product. So they’re not gonna send samples, they’re going to bring the samples. They bring the samples to Seattle. They film themselves going into the Starbucks office. They bring the samples directly up to Howard Schultz. In the meantime, they have thousands and thousands of people tweeting and posting and doing all sorts of things to put pressure on Starbucks and Howard Schultz. And Howard Schultz greets them at the office. He’s aware of it. By the time they get there, he opens the door, he’s there waiting for them. He accepts the cookies. He eats them and he takes them. And we’re in 7,600 Starbucks within a few months.

Evan: [00:15:23] Now, that’s crazy. I think of myself as being—I think I’m crazy. I looked at that and I said to myself, “I don’t think that’s a good idea.” Like, I’m not sure I would have done that, but it worked. That’s insane. You can’t do that. You shouldn’t have done that, but it worked. So every part of me would have said, “I’ve got five reasons why this is not a good idea, and why—maybe there’s a way to work on it.” But they did it and it worked. And okay, fine. Like, there are a hundred things that they should have done after the fact, in how they should have supported it, and done package expansion differently to think about how to take advantage of it, and retail afterwards, and supported it with different types of marketing efforts. And they should have done price package expansion to leverage it at, you know, different stores, especially in the Pacific Northwest and blah-blah-blah-blah-blah. And I can go on for a week about how we should have taken advantage of that moment.

Evan: [00:16:21] But, holy shit. I mean 7,600 Starbucks, they sent a guy over with two suitcases and a thing of product and managed [to] get national distribution at Starbucks. So there’s something magical here. And that, to me, is the thing that’s absolutely incredible and really part of the reason why, or almost all of the reason why, when I look at this thing, I said to myself, “I have absolutely got to be a part of this.” And then, that’s what I mean when I said, “There was something here,” it just wasn’t ready to take advantage of everything yet. And so, 2015/2016/2017 we were starting to get those little lessons and pick up these little tidbits and green shoots were growing, but it needed to be pruned back a little bit, and we needed to get down to like, the core essence of it, and then figure out how to make that work into a big national US brand.

Richie: [00:17:17] What does the first week look like? Where do you kind of hit the ground running?

Evan: [00:17:21] We hit the ground running right before I got there. We had started having some conversations and the first thing that we did was, we cut the SKU list immediately.

Richie: [00:17:31] From what to what?

Evan: [00:17:32] From roughly 20 SKUs down to about seven. So, the first thing that we did was we pared down everything that wasn’t the buttery shortbread cookie squares in our wonderful three flavors that we had. The items that had been sold in Starbucks that had gotten some recognition, the items that were carried on Delta Airlines, the items that were doing so well on the front ends and in our food service accounts. We cut all the rest of the items out of our set.

Richie: [00:17:56] Because?

Evan: [00:17:57] Because those were some lower-margin items, those were the items that weren’t getting a lot of traction, and we needed to focus our efforts more against finding ways to create that package diversity and take advantage of the items that people were trying and liking and receiving well. And we had to find ways to get those items to have more package diversity, we needed to find ways to get those items to be our heroes. Because what we had done is—that example I gave of Starbucks—those items that had gone into those stores were only available in single packages. So we sold them in four-count cookie packs. You couldn’t buy those items in a supermarket. You could, but they were only available in the front end. They’re available in four cookies, you couldn’t buy them in a multi-pack.

Evan: [00:18:41] Now, the cookie category is a roughly $10 billion category. Most people who buy cookies buy them in multi-packs. Very few people buy cookies in single-serve packs.

Richie: [00:18:53] It’s a little ironic.

Evan: [00:18:53] Yeah. Now, candy is different. Like, a lot of candy is sold at the front end, a lot of candy is bought in single packages.

Richie: [00:18:59] “Front end” meaning “register?”

Evan: [00:19:01] At the register, exactly. But most people buy cookies in big packs. Well, we were selling almost all of our cookies in individual packs. And so, because of that, we had the wrong packaging architecture to take advantage of the success we were seeing in Starbucks. So, even though we had this great product, for the most part, most of the places that sold cookies, we didn’t have anything to sell them. Now, we did have a line of some other cookie products and cracker products that were in multi-packs, but they weren’t the ones that people were familiar with. They weren’t the ones that people were trying. So you went to Starbucks and you saw us, and then you went to a store and you saw a completely different product on the shelf, and you didn’t want that. You didn’t know what it was.

Evan: [00:19:45] So, those products weren’t selling. And, yeah, we had gotten on Delta Airlines, again, off of this kind of awareness that we were driving through Starbucks, and then you went into the supermarket and you either didn’t see us or you saw a completely different product that you weren’t familiar with. And so those weren’t selling.

Richie: [00:20:03] Right. So just, I guess, to take a step back, the Starbucks, the Delta, those are the discovery mechanisms, and then you want just kind of endless replenishment to the grocery channel.

Evan: [00:20:12] Exactly. You want—think about, you know, again my background coming from Coca-Cola. They wheeled a cart around, they give you the Coca-Cola, and they ask you, “Would you like the can?” “Oh my god, yes I would love the can, please, leave it there.” They leave it on your thing. You go to a store, you buy 12-pack or a two-liter or a 35-pack when you go to Costco; they want you to stock your pantry. Well, we want you to stock your pantry. The only way that we can do that, though, is if we have a pack to sell you. So, the important thing for us is—and that’s where we get back to the idea of the sort of cross-channel/multi-channel/omni-channel—we didn’t have packages that could go into every channel. We had immediate consumption products. But we hadn’t thought about, “Okay, well, what’s the pack that’s gonna go in grocery, what’s the pack that’s gonna go in the club channel, what’s the pack that’s gonna go into e-commerce?” And we needed to start building out a real price package architecture across channels and focus on getting one SKU or one product right, but getting it right and with depth.

Evan: [00:21:13] The difference in the way we think about our business here in the US now versus the way we think about it in France is, in France they are the innovators. So they are the entrepreneurs they are in five different categories. They have tons of products and they’re known for being innovative. So they have over a hundred different SKUs in France, over a hundred different products, and they launch products constantly. They’ve recently launched vegan mousses, they’ve launched multiple new lines of cookies with ingredients that are sourced from all different places, Ecuadorian chocolates. The fans, they were always looking for what are Michel et Augustin gonna come up with next. What’s the next thing? And that’s what drives the excitement.

Evan: [00:21:56] Here, the country is huge. It’s hard to get distribution for a new product. So it’s gonna take us a really long time to drive critical mass, even on one or two product lines. So, for us, it’s about driving depth. We need to have depth in the marketplace. We need to get awareness of a product and then we need to drive that product across every channel in lots of different packaged formats. So, you think about what’s available in a supermarket, even in multi-packs you’ve got lots of different sizes of multi-packs. You’ve got little bags that you can put in a lunchbox or, you know, portion control sizes. You have big value packs, you’ve got the supermarkets now that want to have club-style packs. Then you have the club stores that have the real warehouse-sized packs. I mean, you can have three multi packs in a single grocery store at this point now. So, we really have to focus now on having the depth of packages that people want. It’s almost two completely different businesses now that we have, when we think about the US and we think about France.

Richie: [00:23:03] So your first six months on the job. Where are you spending your time and kind of what’s working, what isn’t working, at that point?

Evan: [00:23:08] Okay. So, the first six months of 2018, we are spending our time focused on the future. So we’ve cut our SKU list, we are focusing our sales efforts on what is working, at the moment, which is basically continuing to drive front-end sales at traditional retail. So, convenience stores, drug stores, but most of our sales are coming from food service. It’s a very unique business.

Richie: [00:23:34] Say more about that.

Evan: [00:23:35] So, food service for us is corporate cafeterias. So you will find us at the corporate cafeterias of places like Goldman Sachs in New York City, JP Morgan, tons of law firms, Viacom, Thomson Reuters. I mean, you name it. You go into a lot of these corporate cafeterias, cafes at upscale office buildings, and you will find Michel et Augustin cookies. We are a perfect fit, especially in places where people get a per diem or something like that. We have a great French sales force that goes out there and it is just a perfect match. And we go through a crazy amount of product in these places.

Evan: [00:24:11] I’ve never seen a business that grew out of food service. I mean and I talk to people and they always go, “How did you get all these accounts?” But we’re available in the pantries on the west coast out in Silicon Valley, at Facebook, Twitter, Google, Uber, Zillow, and I love the fact that they have these perks, that they give out all these free products. You know, they have these vendor fairs, where they let companies come in. We pitch when they have these vendor fairs, where they let their employees vote on which products they should carry in their micro-kitchens and in their pantries. And we were able to go out and we were able to win placement into some of these spots, and we continue to be carried in a lot of those spaces. Their employees really like us.

Richie: [00:24:55] Right. It’s very habitual space, too.

Evan: [00:24:56] Yeah. And those are reasons that I’ve always felt confident that, you know, again, going back to—we talked about Starbucks was a great example and Delta have been great examples of reasons why I’ve always felt confident that if we could get the packaging right, if we could translate the adventure right, that this was going to take off. Those are similar proof points for me, in that every time we’ve put ourselves in a position where we’ve let consumers and people vote, they almost always vote, “Yeah. We like you. We’d like you to stay here.” Those were the things that kept the lights on for us.

Evan: [00:25:32] And we grew. So, even in 2018, even though we didn’t really launch anything new, we pared back almost everything. We started the work to rebrand because I wanted to translate our story into English a little bit better. I wanted to make it a little more obvious. All the things that I was falling in love with about the brand. And so, when you bring that to another country, you know, there’s the question of, “Okay well I’m I going to just bring this whole kind of—”

Richie: [00:26:03] Apparatus.

Evan: [00:26:03] Yeah. “Do I just bring it here or, or do I have to unravel it? Or do I start it over? Do I start a new adventure here, and kind of let it build on its own?” And I think we kind of started in the middle. We were like, “Let’s bring it over as it is and then let’s kind of say we’re starting a new one next to it.” And it, I’m just not sure we were quite precise enough. And so, it’s not that we had to do every single thing exactly the same way, that we had to replicate their journey explicitly. Yeah, we chose to have banana trees in our space and to call it a banana farm. We chose to do some things exactly the same because we liked it, because they were part of our legend, because they were awesome. Some of them are fun. We are training to be French pastry chefs, because I want to be a French pastry chef. It’s awesome. I want everyone who works for us to be a French pastry chef, and we’re all going to be. That’s part of our history and our heritage.

Evan: [00:27:08] But we decided that, no, what we needed to do was to recreate the story and to just have that core essence be what comes through it first. We needed to start by introducing Michel et Augustin to Americans. We needed to introduce them as these two amazing French icons who are aspirational characters who love French pastry. And who represent that you can follow your dreams. That you can give up and leave your job, your terrible, awful, horrible job, and become a French pastry chef, or become a podcast host, or become a racecar driver, or become the third baseman for the Mets. You know, that’s the kernel of it, and everything else we’re letting kind of fall by the wayside. And I think, you know, we’ve just released our new packaging, we launched our Amazon page, our website our social media. It’s finally come through, and we’ve started to create those shortcuts, and now we’ll build on top of that. And, in the end, I think the essence is the same. Like, people see it. But now it’s a shortcut for us. And over time it’ll start to merge together I think. But our identity now is a little bit unique.

Richie: [00:28:24] Bring us now from the rest of 2018 kind of into this year, in terms of, you mentioned an Amazon relaunch and e-comm. And how did all those new pieces come together as you were figuring out rebuilding kind of the core of the brand.

Evan: [00:28:36] They just did. And, I mean, that’s kind of one of the fun parts of this, is sometimes we just do. Amazon’s a great example. We were fulfilling orders for Amazon out of our banana farm through most of 2018. We started working with an agency that was helping us and we were finally able to get FBA, Fulfilled by Amazon, towards the end of last year for the first time. And we just started doing it. We didn’t really have much of a strategy at first. But part of the beauty of it was, you know, again thinking about it as if we were starting this adventure, and that’s part of the beauty, also of, frankly, of the way that Danone manifesto ventures, part of the freedom that they’ve given us. And, you know, I’m sure that my nose probably looks like it’s turning brown from over here but, you know, they’ve given us the freedom, frankly, to sometimes just go ahead and do first and learn, make mistakes, and then figure it out later.

Evan: [00:29:37] So we launched, we didn’t even launch with a store at first, we just started going out, we started testing prices and playing around. And we did like a $60,000-month, one of our first three months. I don’t even know how we did it. I think it’s still our best month, like, even a year later! And we just started doing stuff like that. We just started learning and we started putting things out there. And that’s been the attitude that we’ve taken, is, yes, we’re part of a larger company now. We have resources, you know, yes, we have, you know, all of these things going for us, but we’re treating ourselves literally like we are still a completely independent startup brand that owes nothing to no one. And like, we can just do whatever we want and get away with it and mistakes be damned. And we’re still, that’s sort of the approach that we’re still taking, when it comes to everything.

Evan: [00:30:25] And so that’s the approach we’ve taken. We were not strategic about the way we thought about rolling that stuff out. We said, “Let’s do it. Let’s be really careful about it, so that if anything goes wrong, we pull everything down, have safety first.” But we’ve taken that approach to almost everything at this point.

Richie: [00:30:41] So what do you see, I guess, as the role of e-commerce in all of this?

Evan: [00:30:45] I see the role of e-commerce as almost like what I just said, as being a way for us to go out and try things. Brands like us, we don’t have any control. We have no power. The big brands complain, “Amazon has so much power. Oh, they control all the data.” Well, try being a small brand. We don’t have any data. I can’t afford data and our distributors control all the data. I love our distribution partners, don’t get me wrong, they are wonderful and they are the lifeblood of our business…but they don’t give us any data. And our broker partners are absolutely wonderful. I adore them. They don’t give us any data. Everyone charges us for data. So I don’t get any data, but I can pick up my phone right now, and I can see real-time my sales on Amazon, and I can look and I can see my ROI on our campaigns. I get all sorts of stuff from Amazon.

Evan: [00:31:38] No, I can’t get the same level of data that I guess Coke and Dannon and General Mills and all of them can’t get the same level of detailed data that they can get from you know 84.51 or from other things. Oh well, boo-hoo. Like, cry them a river. For me, I get more from Amazon than I get from anybody. So I love putting stuff out there. I can test different prices, we can get demographic data, I can get all sorts of stuff from there. So, for me, throwing stuff on Amazon is amazing. For me, being able to control pricing on Amazon is amazing. I expect us to be putting more products out there. I don’t know what will happen the bigger we get. Yes, over time we may get frustrated by certain elements of it, and we certainly have some challenges when it comes to our products being chocolate. We have some issues in the summer, because our products are not eligible for FBA, which means we go off-Prime in the summer, so there are some categories because—

Richie: [00:32:34] Because of the heat?

Evan: [00:32:35] Because of the heat.

Richie: [00:32:35] Wow. Huh.

Evan: [00:32:36] So there are some category-specific issues that we have, but I love Amazon. I welcome our Amazon overlords. Like, I think it’s absolutely fantastic. And I think a lot of it is just sour grapes on the big companies’ [part], because they’re just seeing their position of power kind of erode, but we will continue to throw everything that we have at Amazon.

Richie: [00:32:55] Yeah. Do you have your own e-commerce as well?

Evan: [00:32:57] We don’t, yet, but we have the infrastructure in place for it. And I think that there is some huge opportunity for that too because, especially, we think about the sort of innovative history of Michel et Augustin. You know, the idea that we can launch some of our own new products or some of our own merchandise or things like that and sell it direct to consumer just makes a lot of sense. It’s actually kind of funny because we have to ship our own stuff during the summer, we’ve actually had to build that infrastructure to do our own shipping. So, you know, we don’t have any plans to do it yet, but the fact that we can’t ship through Amazon during the summer has actually forced us to build that infrastructure. So it’s not something we actually have plans to do but it’s something we now have the capability to do it.

Richie: [00:33:40] Sure. When did you feel like all this work was starting to pay off or feel like it was working? Or has that not happened yet?

Evan: [00:33:46] Three weeks ago.

Richie: [00:33:47] Say more.

Evan: [00:33:49] Well, it takes longer than I thought, which is another one of those kind of key lessons. Coming out of a big company and coming out of a DSD kind of environment…especially also coming out of like, a big brand. I kind of thought that stuff just gets on shelf, and I had this impression that you push a button and you say “Okay, well here’s the program, here’s the product, go put it on shelf.” And we had finished everything here, we finished our new, you know, bags for grocery. We had sell sheets, we had product. We rebranded, we debuted our new branding, everything was ready to go and nothing was happening. I was like, “Okay. Why isn’t anything happening? I said ‘go.’ Like, go!”

Richie: [00:34:37] From a sales perspective.

Evan: [00:34:38] Yeah. And so apparently it takes time. Not only does product have to get here, but then setting up individual new items with distributors, actually getting them to place the orders, and then like, getting it into the DCs, and then you have to get the customers set up, items set up, takes forever. All this stuff that I didn’t realize. And then even once they do that, like getting the POs to come in—so, finally, in the last couple weeks, we’ve actually seen the POs come in. I’ve learned the PO is actually the thing that matters. Now, I know like, people will hear that and be like, “What a moron!”

Richie: [00:35:12] Like, “They told me that on Shark Tank!”

Evan: [00:35:15] Yeah. Like, that’s the difference though, and I and I think that’s now what I’m finally starting to learn about this business, is there is a legitimate difference between thinking that you can run a business and thinking that you understand what it takes to run a business, and actually running a business. And that there is a difference between running a business of 40 people and having people underneath you who are handling that stuff, and you being able to stay above the fray. And you not having to worry about the POs, and you not having to worry about inventory and, you know, cash flow and things like that. And worrying about, okay, like, when does the inventory ship and when does this—There’s a big difference between being able to be above that and being in it, and I think coming into this whole experience I always felt like I was going to be kind of a little bit above it. But I realize now I’m completely in it. And I didn’t understand what it meant to be in it, but now I do.

Evan: [00:36:19] It’s really only been within the last month or so where it’s all coming in now, though. The customers are coming in, the big regional customers, some national customers. We’ve already hit the shelves on Safeway in Northern California, we’ve just gotten POs from two major customers in the northeast, we’re talking about 600 doors that have opened. And literally, actual, POs. We have a cowbell that we ring, because of course we do. Vache à boire, drinkable cow, so we have a cow bell. And we got to ring it, because the actual orders came in. And it’s weird because I put together a 30/60/90-day plan when I started, and 90 was the end. So how stupid am I? We’re now 18 months in, you know, almost 24 months, but we’re finally seeing sort of the fruit of our labor. We’re seeing the actual dollars rolling, we’re seeing the actual product roll out, and I’m finally getting the pictures now. I’m getting the Instagram photos from friends, I’m getting the calls from family who are showing me, “I found this, I saw this.” And that’s how long it takes! It takes 18 to 24 months, but we did it.

Richie: [00:37:34] How do you now think about, I guess, scale and speed. So, the speed at which you want to get bigger, how big that actually gets. How do you not get ahead of your skis on it? How do you think about all that?

Evan: [00:37:45] Scale is hard. It’s easy to think about scale when we’re thinking about the regional players, because we can map that out right now. We can map out what it looks like to add, you know, the ShopRites of the world, and the Stop & Shops, we can think about what it means to add regions of Safeway and regions of those types of accounts. It gets hard when we start looking at some of the national players because, you know, we can plan for those regional accounts. It’s really hard when we look at—but what does it mean to add a Kroger, what does it mean to add a Costco, what does it mean to add a Target or a Walmart. And that’s where the business really does start to multiply.

Evan: [00:38:23] So, when it comes to scale, I mean, we’re ready for it. I think that’s part of the advantage that we have, of having Danone behind us. And part of the advantage that we have of having an established business in France behind us is that we’re prepared to scale. You know, we’re not a company that is sitting here going, “We can’t afford to scale.” You know, we have the capability to do it, we have the team to do it. You know, one of the things that I did as being a person who thought they were gonna be conducting, you know, versus doing as much, is that I hired more people. So we have a good quality team with a lot of people on it. We’re ready to go. So I’m not worried about scaling at all. I think we’re completely prepared and I think we’re really close to doing it. We did all the work that we needed to in 2018 and in the beginning of this year to put ourselves in a position to be ready to. Now it’s just a matter of, we need that one last thing to go our way. And I think we’re pretty close. It’s gonna break. It’s gonna break in two months.

Richie: [00:39:30] What do you think you have learned from the mothership in France and what do you think they’ve learned from you in the last, almost two years?

Evan: [00:39:38] I know for a fact that I’ve learned from them that I have to be willing to open myself up more, to take risks, and I have to open myself up more to try things that I wouldn’t otherwise, because that Starbucks story that we talked about earlier is a perfect one. That is something that I never would have allowed myself to even consider. And we’ve already talked about a number of ways to leverage ideas like that. It wasn’t that hard to just tweet a little bit at Howard Schultz and, when they saw traction, they moved on it. If it didn’t work, if nobody was paying attention, they could’ve just stopped. But the fact that it was showing traction meant, okay, let’s keep going and finish this thing. You know, in terms of what they’ve learned from me, I think they’re learning some of this discipline and some of the focus. I’d love to say they’re learning that from me, but I think they’re learning that from Coca-Cola, frankly. That’s one of those things that I’ve managed to channel, that is something that’s inherent in me. That’s something that unfortunately just became stuck to me from too much time down in Atlanta.

Richie: [00:40:35] What are you most excited about that’s on the horizon in the next six-to-12 months?

Evan: [00:40:41] We have a new product coming out in the next six-to-12 months. I think we’re going to be testing it potentially with the direct-to-consumer website for the holidays. I can’t tell you what it is, but I can tell you that it will revolutionize the way Americans see French food. It will change French food forever. It will democratize French food in a way that nothing has ever done before. And it will be the first time that French food has ever been brought to the masses before. There has never been a French product or French brand that has ever been for the American people, and that’s part of what Michel et Augustin, like, aims to be. And so if you think about it, why is Michel et Augustin, actually, why does it exist? Why are we gonna be here? You asked the question earlier, “Why is Danone—what do they see in this?” So the same thing that they did in France, which was basically this kind of fun, more populist version of French cuisine. America is ready for that.

Evan: [00:41:48] America has never adopted French food at all. You can look across the spectrum of our shelves in supermarkets, but even QSR, quick service restaurants, to me, is the perfect place to look to see Americans’ just absolute hatred of French food. Okay. So we have Italian, we have Mexican, we have Asian food. Name a country and they’re represented in the QSR spectrum somewhere. Not French. And I’m not taking [Le] Pain Quotidian or Au Bon Pain or any of those. Americans are uncomfortable with French. So no one goes to French restaurants. There’s a famous Key and Peele sketch where they’re at a French restaurant and the whole joke is basically that he pretends that he knows how to speak French, but he can’t say anything on the menu, and it’s ’cause Americans are terrified of French. We’re terrified of it. The t’s don’t sound like t’s, the u’s sound like weird things, the r’s don’t make sense. We’re so afraid of it that we abandon it. And so there’s no French restaurants, no French QSR, no French brands.

Evan: [00:43:01] Part of the opportunity here for Michel et Augustin and for this new product that is going to be coming out, you know, either in the fourth quarter or early in the first quarter, is find a product that Americans will like, can pronounce and can be consumed every day. That is, an everyday item, all kind of need-states, occasions. Think about, you know, things like potato chips and think about things like pretzels and think about all those types of—

Richie: [00:43:33] Staples.

Evan: [00:43:34] Exactly. There’s never been a French staple. They’re an iconic food culture. But, in the US, not really. And even the brands that have come in that are French and have done well, the Evians, the Perriers, which are iconic brands, have always remained at the premium level. They made it into culture but they’ve never really become mass products. So our opportunity, when you think about it, is, who better than Michel et Augustin to be the first people to popularize a French product and become a popularized French brand. Now, that doesn’t mean we’re gonna be cheap, but Americans aren’t always looking for cheap things. You don’t have to be rich to want good stuff. People pay for good products and we make good products. Not everything we make is organic or has the best ingredients in the entire world. We use the right ingredients, we use good ingredients, we use ingredients that you could find in your kitchen. And so, when we make this absolutely killer new thing, I think you’ll see, for the first time, Americans actually see, “Oh? French food. I’ll buy that.”

Richie: [00:44:43] Is this something that exists in Europe or is it developed for this market?

Evan: [00:44:47] Developed by this market for this market.

Richie: [00:44:49] Very cool. The last thing I guess is, we didn’t really talk about price at all. Just in terms of, you mentioned undertones of, kind of democratization and so forth. How do you think about who this should be for and accessible to?

Evan: [00:45:00] We’re a little expensive right now. Luckily, because we have a lot of our business in food service we are able to be at a price premium there. Those business models today, immediate consumption products, single-serve products can command a bit of a premium. So we are able to get some margin out of that and our pricing is coming down as we move into grocery, where we’re able to charge less per cookie for being in multi-packs.

Evan: [00:45:24] I mean, we are able to promote a little bit more. So you’ll see us as we go into supermarkets have more of a high/low in most places. Or, you know, some of our accounts will be everyday low price, where we’ll have better pricing on a per-day basis. So, you know, I feel good about the direction that our pricing is going in but, obviously, as we get bigger too, it’s gonna be easier for us to start to hit those price points. Right now, you know, we’re importing everything from France, it’s coming over in fairly limited quantities, so I think, long-term, our pricing is going to get better and we’re gonna be able to scale and get more democratized. But, listen, pricing is a challenge, and obviously we use real butter. So, you know a lot of it is tied to the price of butter. We use real chocolate. So we’re a little bit tied right now to the price of ingredients and the price of transportation. So just keep your fingers crossed that we’re able to keep the tariffs away.

Richie: [00:46:14] Awesome. Thanks so much for talking.

Evan: [00:46:16] Absolutely.

Richie: [00:46:22] Thanks for listening to the Loose Threads Podcast. You can read full transcripts of the podcast and join the newsletter at LooseThreads.com. Feel free to leave review on iTunes, we always appreciate it, and thanks to George Drake, Jr. for editing this episode. We have a great roster of upcoming guests and we hope you tune in next week.