How do you create a brand with a destination in mind? That may seem like a vague and dreamy question, but in an industry where the margins are slim and competition for the shelf is challenging, starting your good food brand with a plan for where you ultimately want to take your business will get you to your goals faster than if you adopt the trial by fire approach.
When you imagine the future for your brand, what stores are carrying your products? What kind of value does it add to the market? What is your brand known for, and what kind of community surrounds your product line? Spending time mapping out your future state is a valuable exercise. When you begin with your destiny in mind, you’ll know exactly how to handle each challenge you face along the way. The answers become easy when you face each issue by asking yourself, “what would my good food brand do?”
When experienced product marketer Sandra Velasquez decided to launch her own beauty brand, she defined her destination first – even before selecting an ingredient list. She knew what kind of retailers she wanted to attract, and she built her brand from the ground up with those premium accounts in mind. And that meant considering everything – the cost of quality ingredients, the labor for producing it, the expense of social media management, and even the elements of her package design. Building these needs and expectations into her business plan prepared her for growth. And understanding her end goals from the very beginning attracted her perfect partners to her brand – she sent all the right signals that she was a brand that would elevate their brand.
In this episode, Sandra shares the ups and downs of her journey in building a remarkable brand for her business, Nopalera. She reveals the truth behind branding, distributors, wholesale, and merchandising. She also encourages everyone to take advantage of advanced technology, which means it is a lot easier to find people. So, while anyone can make you a sell sheet, not everyone can build your brand from the ground up.
Virginia Foodie Essentials:
Building your brand is thinking of why you’re building it, who it is for, and the space it is going to fill in the market. - Sandra Velasquez
Building a brand and selling wholesale or just, in general, is also about timing. - Sandra Velasquez
Getting your products to the stores that you want means building the relationship aspect and knowing how to leverage those distributors. - Sandra Velasquez
Building a strong brand, doing market analysis, and understanding what value you bring to the market and category are effective ways for you to bring your product into the stores. - Sandra Velasquez
There is no trick in getting into wholesale, you have to do your homework and study the market because you have to figure out why those wholesale accounts want you. - Sandra Velasquez
Passion is what drives the creative process, and that doesn't really have a great financial ledger attached to it.- Georgiana Dearing
The design of your product is going to be the most important investment you can make and it is one that you will never regret. -Sandra Velasquez
Key Points From This Episode:
Branding can either make or break the brand that you wanted to create.
In business, you should assume that you're paying someone else to do everything right at the beginning because once you stop doing those tasks, you’re going to have to pay to get them done for you.
All stores are not good for your brand and all stores are not the right stores for your product.
Researching the market and your competition and acknowledging the needs of the retailers that are your target customers is essential to securing the right wholesale accounts for your brand.
Merchandising is important, and you need an advocate who will walk right through the employee doors, go to the back, pull your products out of case packs, and put them on the shelf.
Distributors are not your salespeople who will promote your product for you, but that does not mean you can’t have them work for you, you have to leverage those relationships.
Doing a basic kind of cash flow statement is helpful but doing it from the beginning creates a greater impact on your business.
Buyers assume that brand founders understand how things work. Brokers assume that you already know the language but the truth is you don't unless you've done it before.
The concept of merchandising is doing store visits, showing up, and going on ride-a-longs.
The biggest part in business is doing the math because it is easy to lose money sometimes and not know why.
Other Resources Mentioned:
More About the Guest:
Sandra Velasquez is the founder of Nopalera, an award-winning Mexican Botanical Bath & Body brand based in New York City. It is currently sold in Nordstrom, Credo Beauty, Free People, and over 300 independent retailers nationwide. She launched Nopalera from her Brooklyn apartment in November 2020 with no outside funding, while working three jobs, at the age of forty-four. Prior to launching Nopalera, Velasquez was the leader of the Latin Alternative band Pistolera, which toured internationally, released three studio albums, and had its music featured on hit TV shows like Breaking Bad, Sons of Anarchy, and NPR’s Tiny Desk Concert. She also worked as a sales manager for several CPG brands across categories. Sandra is the host of The Nopalera Podcast and works as a mentor to emerging CPG brands through her online classes.
Connect with Sandra Velasquez:
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[00:00:00] Sandra Velasquez: They always want to know, how do you get into wholesale? How do you get into boutiques? How do you get into Nordstrom? And the question, we have to take it back, right? Because the real,real answer of how you get into those stores is by building a strong brand and doing market analysis, and understanding what value you bring to the market, to the category. It happens way before you get into those stores.
[00:00:17] Georgiana Dearing: Welcome to The Virginia Foodie podcast, where we lift the lid on the craft food industry and tell the stories behind the good food, good people, and good brands that you know and love. If you've ever come across a yummy food brand and wondered, "How did they do that? How do they turn that recipe into a successful business?" Then we've got some stories for you.
[00:00:44] Georgiana Dearing: Hi Foodie friends. Welcome back to the podcast. I’m George Dearing, founder of vafoodie.com, and I provide content marketing strategy and coaching for the craft food industry. I know that steady sales require steady marketing, but it’s so easy to let operations get in the way of your best marketing intentions. That’s why I give good food brands a framework for their marketing strategy, making it easy to say the right things at the right time for the right audience.
[00:01:15] Georgiana Dearing: Distributors are one audience that often gets overlooked when startup brands are trying to get on grocery store shelves. For today’s episode, I’ve called on an expert to talk about the distributor relationship.
[00:01:29] Georgiana Dearing: Sandra Velasquez is a former Sales & Distribution Manager in New York City who has worked across several categories in the Natural & Specialty Channel. She’s also the founder of a quickly growing beauty brand, Nopalera. Sandra founded Nopalera to celebrate her heritage as she states, loud and proud. Nopales, or prickly pear cactus, are abundant in Mexican culture and are the central ingredient in her artisan bath and body products.
[00:02:00] Georgiana Dearing: I first heard of Sandra because of her Distro 101 course. This small group coaching program leads start-up food brands through all the ins and outs of working with Distributors. In her career in sales & distribution, Sandra opened hundreds of accounts with national distribution without the help of brokers, and lucky for us, she’s channeling all that experience into her coaching community over at distrotalk.com.
[00:02:28] Georgiana Dearing: Sandra started Distro 101 because distribution channels are a confusing world, with special jargon, and it is easy to miss opportunities or make costly mistakes if you don’t understand what’s going on.
[00:02:41] Georgiana Dearing: Surprisingly, as the leader of an up-and-coming beauty brand, Sandra had to learn a lot of those rules all over again. In our conversation, we compare and contrast natural beauty with natural foods. There are a lot of similarities, but the margins are shockingly different. Plus, she shares her top advice for start-up food brands.
[00:03:04] Georgiana Dearing: Listen in and you'll learn a lot. I guarantee it from Sandra Velasquez.
[00:03:10] Georgiana Dearing: So I'm very excited today to sit down and talk with Sandra Velasquez from Nopalera. Sandra, thank you so much for joining me on the podcast.
[00:03:19] Sandra Velasquez: Thank you for having me. I'm excited to have this conversation.
[00:03:21] Georgiana Dearing: Well, I always ask my guests to explain themselves to my listeners. So could you tell my audience who you are and what you do?
[00:03:29] Sandra Velasquez: Yes. So I guess the Cliffs Notes version is that I am a former professional musician turned CPG sales representative turned beauty founder.
[00:03:37] Georgiana Dearing: Oh, my goodness. There's plenty of things in there that I could ask you about like professional musicians. But I think I'm going to stick with the part about being a beauty founder.
[00:03:46] Georgiana Dearing: So I found you because you offer a course and I work with food brands, but can you talk a bit about the Nopalera brand and your product line? Because I think that's where there's some very interesting similarities between what you're doing and my craft, food brands.
[00:04:01] Sandra Velasquez: Yeah. So Nopalera is a Mexican botanical bath and body brand really rooted in my Mexican culture. And our star ingredient is the Nopal otherwise known as the prickly pear cactus, but us Latinos, we call it the Nopal and it's really culture forward. It's really to celebrate and elevate our culture and really to elevate the perception of the value of Latino goods in the marketplace.
[00:04:24] Sandra Velasquez: And so, you know, I sell to places like Nordstrom and Credo Beauty, and Free People. And launching into Whole Foods, actually in New York city this month, and 300 boutiques nationwide. So we have three cactus soaps, we have cactus flower exfoliants, and we have moisturizing, but like solid body moisturizers. And we use the cactus, different parts of the cactus and all of our formulations.
[00:04:46] Georgiana Dearing: My clients work in foods that go in the body and your products go on the broad body. And can you talk about your ingredients choices and sourcing, and how you make these decisions?
[00:04:57] Sandra Velasquez: Yeah, so I created the brand with a destination in mind, and I really wanted to create a brand that was a clean beauty brand, which I know is the term that gets used, thrown around. Right? So what does clean mean? So I really formulated just to be very clear. I formulated my products with Credo Beauty, the retailer in mind because they have some of the strictest ingredient standards in the country. And you know, here in the United States, the list of banned ingredients is very short. And the list of banned ingredients in Europe is very long. And Credo Beauty has a very long what they call the "dirty list."
[00:05:28] Sandra Velasquez: And so I formulated my with that "dirty list" next to me, these are the ingredients that you can not use, otherwise we can not carry your product. And that really had to do with, again, my vision of building this brand that was going to elevate my culture. And I didn't want to create another brand that could just be sold on Etsy or Amazon, where there's no label requirements and you can pretty much put whatever you want in your product. So I formulated with a retailer in mind based off of the brand that I wanted to create.
[00:05:52] Georgiana Dearing: Now that's an interesting piece of your origin. Like you say, you formulated it, where you literally in the kitchen mixing things up?
[00:06:00] Sandra Velasquez: Yeah. Good question. So I actually, when I decided to start this brand, I went to formulation school because I really wanted to understand ingredients. And I also couldn't afford to go straight to a co-packer. It was just me. I was self-funded. I had no savings. I had no friends and family with money. So I actually made all of the products myself for the very first year. And at the end of 2021 is when I finally handed the formulas over to a co-packer. And that was a big milestone for me because being a manufacturer is a full-time job and running a company is a full-time job. They are not the same thing.
[00:06:30] Georgiana Dearing: Oh, my goodness. Right there, I see echoes of all of the food industry right there. That's a lot. And having to wear so many hats is a lot.
[00:06:38] Georgiana Dearing: Co-packing is a huge setup. So congratulations.
[00:06:42] Sandra Velasquez: Thank you.
[00:06:42] Georgiana Dearing: So one of the things you said is you mentioned having a retailer in mind and on your podcast, you talked about vetting wholesale partners.
[00:06:51] Sandra Velasquez: Yes.
[00:06:52] Georgiana Dearing: Can you talk about how you as a beauty brand get into those stores?
[00:06:57] Sandra Velasquez: Yes. So I think the first thing is cause people, this is one of the questions I get the most from fellow founders, from people who are just starting or who are maybe a few steps behind me. They always want to know, how do you get into wholesale? How do you get into boutiques? How do you get into Nordstrom? And the question, we have to take it back, right? Because the real,real answer of how you get into those stores is by building a strong brand and doing market analysis, and understanding what value you bring to the market, to the category. It happens way before you get into those stores. It's not about having the right contact for the buyer.
[00:07:28] Sandra Velasquez: I remind people, all the buyers that you want are on LinkedIn. We live in the age of the internet. It's not hard to find people. So anyone can make you a sell sheet.
[00:07:36] Sandra Velasquez: You can find any contact you need. Getting into those stores, how did I get into them is that I spent the first year working on building my brand. And by that, I mean, the mission, the values, the core values, the branding, the packaging, the photography, that is why I'm in those stores. Those stores came to me.
[00:07:51] Georgiana Dearing: Oh my goodness. They came to you.
[00:07:53] Sandra Velasquez: Yeah.
[00:07:53] Georgiana Dearing: You're like preaching to the choir here about brand building. Did you do that work on your own or did you work with a partner to help you tidy up the edges of your ideas?
[00:08:04] Sandra Velasquez: Yeah. So the first person, when I had the idea, was in the summer of 2019, when I had the light bulb moment, the lightning bolt for this idea for this brand, the first person that I called was my designer. And I said, listen, I'm building this brand. This is why I'm going to build it. This is who it's for. This is what space is going to fill in the market. And this is where I wanted to sell. And we spent nine months on the branding. I am not an artist, right? I mean, I'm an arm of musical artists, but I don't draw with my hands.
[00:08:30] Sandra Velasquez: So, I knew that especially in the beauty industry, I mean, and this is true. I think for any industry this kind of just goes into human psychology, right?It's colors, shapes, then texts. So I knew that the branding was going to make or break this brand that I wanted to create. And for the type of brand that I wanted to create, this high end, beautiful, iconic, next legacy type of brand that the design was going to be the most important investment and it is one that I will never regret. So I spent nine months with my designer, tweaking that branding, and that is the reason why I'm in all of the stores.
[00:09:05] Georgiana Dearing: Colors, shapes, and text. That's a great thing. I started out as a designer, so that is exactly it. You know, I always amused when I was doing my research on how your soaps or even the shape of a prickly pear.
[00:09:18] Sandra Velasquez: Yeah. The pad.
[00:09:20] Georgiana Dearing: Or whatever.
[00:09:21] Sandra Velasquez: Yeah, yeah. Exactly. That was also on purpose. Again, I wanted it to be instantly recognizable and that's what the shape of my soap is, what I consider my brand moat. That's like my Coca-Cola bottle that you can recognize from afar because no one else has that shape because I drew it with my hand and I had a custom mold made, so yeah.
[00:09:38] Georgiana Dearing: So there's so much in here. So you said these brands came to you. How did they find you? Where were you?
[00:09:43] Sandra Velasquez: Yeah, so these wholesale partners, these boutiques, they came to me, they found me on Instagram. And I think that once you get into SOM, then they start to, they're all on Instagram, they kind of like how we as brands have competitors. Boutiques are kind of on their own Plainfield and they see that another boutique has you so, they want you, and it just kind of starts to spread that way. But again, like, why do they come to me? No one can see the quality of your ingredients. No one can see your efficacy. There has to be something in the branding that pulls them in. And my branding is working really hard to pull everyone in.
[00:10:13] Georgiana Dearing: Yeah. So you are in Credo.
[00:10:16] Sandra Velasquez: Yeah.
[00:10:16] Georgiana Dearing: I have that in your vision. How did that come about?
[00:10:19] Sandra Velasquez: Yeah, like I said, I built my brand for Credo. I followed their ingredient standards so that I knew that when that opportunity came, that I at least checked all of those boxes. And building a brand and selling wholesale or just in general is also about timing. And this is a little trickier, right? Because life is moving forward and things are always changing but we are in this moment in history. Collectively, because of everything that has happened in the last couple of years, retailers are waking up and they realize that they need to have more diverse shelves. And so, I think that I could have gotten into these retailers maybe 10 years ago. I don't know if they would have been ready, but now, retailers really have their eyes open and they see like, okay, there's more out there. We can't just have French and Italian brands. Not everything can be just marketed to white people. We need you know, they're really just, even from a financial perspective, they're leaving money on the table by not selling brands owned by founders of color that serve those communities.
[00:11:11] Georgiana Dearing: Oh, of course, of course.
[00:11:13] Georgiana Dearing: So you've had all this growth and you've moved into some retailers that are kind of like cream of the crop here and your target Credo. And the way I found you was through your Distro 101 course that you had been offering. I think it's a great resource. Can you talk a little bit about what you didn't know that you didn't know when you started trying to work with distributors? Because that's the thing my clients run up against. They didn't even know. They didn't know this thing existed.
[00:11:43] Sandra Velasquez: Yeah. I mean, I teach a four week class on this so I could try to condense it, but the main thing that people don't know is number one, your distributor is not your sales representative. People think that they're going to sign with a distributor and now all of a sudden, you have all these people that are going out and promoting your product. And it's like, no, you are like one of hundreds, if not thousands of brands on this distributor roster, it's like when, because I was a musician, I always compare things to music. When people think that they want to get a record deal. And they think that that's going to solve their problems, that's going to catapult them to fame. There's so many people that have gotten record deals and have recorded records, and those records have never been released. So the answer is not, we do not place our future growth in the hands of other people. It's still on us to make our product sell and to bring customers, and create a sticky brand where people keep coming back for more.
[00:12:31] Sandra Velasquez: So number one, your distributor is not your sales reprentative. It doesn't mean that you can't have them work, you know, leverage those relationships, but it takes work. It takes some work like you have to show up and you have to go on rides alongs. You have to do store visits. You have to merchandise. There's a lot of in the trenches work. That's a big part, I guess a part B to that component is the concept of merchandising. Like this blows a lot of people's minds when I teach this in my class where I show them again through pictures because my class is very much like Insider Intel. I documented my life as a sales representative so that I could teach it to other people. And showing people how I'm merchandising, how I got full shelves of the brands that I worked for and how I move things around, and how I stock the shelves. And their minds are blown because they are like, I thought that the store was supposed to do this.
[00:13:14] Georgiana Dearing: Oh no. My father-in-law drove a bread truck for years and that was his job. You bring the bread in and you rearrange it, and you move the competitor that's in your space. Yeah, the whole thing.
[00:13:26] Sandra Velasquez: Yeah, it's a whole thing. And so they're minds are blown. Like, wait, you go through the employee doors and you go into the back, and you get your product, and you put it on the shelf? That's a yes, that is exactly what we do. So that part and then I think the other biggest part is math. And that is obviously the most important thing because it's so easy to lose money, and not know why. And it's a little hard to verbalize without looking at a visual, but understanding that when you bring a distributor into the mix, you now have to sell for a distributor price to them, and then they're going to take a margin, and they're going to sell it for the wholesale price to the store. And then the store sells it on the shelf for the SRP.
[00:14:02] Sandra Velasquez: So when you are doing a promotion, at the store level and it's 15% promotion, MCB or whatever, it's 15% of the wholesale price. That price at the distributor sold to the store for not your distributor price. And so 15% of what number is the question. And that is the part that, I think, continues to trip people up. So this is why I created it like this, I call it the margin plug, and play with this visual calculator so that people can really see the bird's eye view. Like, here's you and then it's the distributor price, and then it's the wholesale price, and then it's the price on the shelf. And so when you're doing a promotion, it's 15% of this number over here, which is not to be confused with when you do a 15% OI to your distributor, and that is off of your distributor price. And that's where grocery gets really convoluted and complicated when you're doing these layer discounts of like a 15% OI plus a 5% MCB. And people are like, how do I even calculate this? How do I understand? Here's my chart for these initials so I can remember what we're talking about.
[00:15:00] Sandra Velasquez: Yes. And I think trade spend is one of the biggest gray areas for a lot of brands especially for a lot of new brands I should say. Right? Who has never done it before, how do you account for the trade spend? Where does that go on your financial model? And so I think those are the two main things, building the relationship aspect and how to leverage those distributors to help you get into the stores that you want, and then the map.
[00:15:24] Georgiana Dearing: Oh, yeah.
[00:15:24] Sandra Velasquez: And I could go on, but I still would say like, those are the two main ones.
[00:15:27] Georgiana Dearing: Oh no, I hear you. Those are the two big ones and the math really, is trouble.
[00:15:32] Georgiana Dearing: The thing I see the most in my world is brands start out at the farmer's market level and they go, oh, well, it's cost me this much. I'm making a lot of money. And then they move into retail and it's like, Hm, no, the distributor needs their cut and then the retailer wants to take their cut. It all gets piled up on top of what you're doing and I think it's a big eye-opening experience really.
[00:15:55] Sandra Velasquez: And I think this is where, when I talk about how I built my brand. Beginning with the end in mind is across the board. So I don't care whether you're making a vegan cheese or you're making any potato chip or you're launching a beauty brand. Beginning with the end in mind is what will save you because from the very beginning, you can say, okay, Hey, I'm going to start a new food brand and I'm going to start at the farmer's market. But I know that eventually I want this product to sell on the shelves of Costco or whole foods.
[00:16:20] Sandra Velasquez: You need to go find out what those stores' margins are? What do you need to do to sell on the shelves? And how does that work out mathematically backwards? So that even when you're at the farmer's market, you're like, okay, I'm starting, I'm going to go start at the farmer's market to just get the word out, get some customer feedback. You still are pricing it with the end in mind, knowing that you're going to bring in these two middlemen, IE, the distributor, and the store, and between you and the customer. It's not just going to be you handing the product over a table to your customer anymore.
[00:16:46] Sandra Velasquez: So you begin with the end in mind, which usually means, and what I have found, I mean, if you're working with brands that are starting like in food kitchens or at the farmer's markets, their costs are way too high. It costs them way too much to produce their product and so, then they cannot sell into retail because they did not begin with the end in mind. They started passionately. And I see that a lot too, with people that come through my class, they started passionately and have this idea for a food brand and then they go and they try to make it, they rent kitchen space, or maybe they do a small run, but they don't look 10 steps ahead. And then the whole thing becomes, well, my greens are expensive. I'm like, everyone's ingredients are expensive.
[00:17:19] Georgiana Dearing: Yeah.
[00:17:20] Sandra Velasquez: So it is tough but again, beginning with the end in mind, where are you ultimately trying to take this? What will your business look like in five years? And then work backwards.
[00:17:28] Georgiana Dearing: Yeah. I think some of that is confidence, like a lack of confidence too. You're right. There's two things, there's passion driving the creative process that doesn't really have a great financial ledger attached to it. And then there's this lack of confidence, it's setting the price high enough to cover the costs of what you're putting into it.
[00:17:47] Georgiana Dearing: So I have a question about your ingredients real quick, and that is, if you're using cactus and you're in Brooklyn, when you're sourcing it, how did you know at the beginning, when you're making very small batches, how to purchase it, or did you start small batches knowing that, oh, if I order this much more, my costs will actually be lower.
[00:18:09] Georgiana Dearing: Yeah. So when I first started, I mean, in the very testing phase, when it was just me playing around, I was using actual cactus from my parents' garden. And so I was using the cactus that was right there. That's how the whole idea came to me. I was learning how to make soap and these recipes called for aloe vera and I was like, I don't have any aloe vera. Oh, but I have some nopal in my parents' front yard so, let me just use that. So obviously you can't scale that. So then I had to go and find suppliers imported from Mexico and then use that. In the very beginning it was like, from the yard but when I was actually making the products and it was already, I was sourcing from suppliers.
[00:18:41] Georgiana Dearing: Oh, okay. So you kind of already had a sense of what, well, if you had the end in mind and you had a sense of what scale was going to look like for you.
[00:18:48] Sandra Velasquez: Yeah.
[00:18:49] Georgiana Dearing: Is there anything else that you can think of that was like a surprise to you when you started dealing with retail partners?
[00:18:56] Sandra Velasquez: In beauty or in grocery?
[00:18:57] Georgiana Dearing: Ah, that's a trick question. You just said you're going into a whole food. So how about groceries?
[00:19:03] Sandra Velasquez: Well, no, cause I've dealt with whole foods before multiple times through other brands cause I was a CPG sales representative so, I worked for Van Leeuwen ice cream. I worked for HiBAR. I worked for MAST Brothers chocolate. I worked for a beverage company. So I was well-versed in the trenches of New York grocery and beauty is totally different. It is very,very different. It is a completely different vertical. There are no distributors. The margins are much, much higher for everyone. In grocery, the margins are so, so, so small. It's actually painful to watch because I still teach Distro 101 to grocery students. And you know, if you're making a drink that you're selling for 299, there's only so low that you can go to make this product. Right? So we're talking like, you're making cents, whereas, in beauty, the standard margin of beauty for a brand is an 80 margin.
[00:19:44] Georgiana Dearing: Wow.
[00:19:46] Sandra Velasquez: And that is you have to start there because if you're going to do business with the Sephora and the Credos of the world, they take a 60% margin.
[00:19:53] Georgiana Dearing: Oh my.
[00:19:53] Sandra Velasquez: It's a totally different world. So this is why I'm, you know, I have this kind of split teaching, right? Because I can't really teach beauty founders the same way that I teach food and beverage founders. It really depends on where you're trying to sell. And that again, sorry to sound like a broken record, but beginning with the end in mind, where are you trying to sell this product? Because there are food brands that also can sell a boutique. And so it really depends on, like MAST Brothers is a great example, they're technically a food brand, right? They make chocolate and they sell it at Wegmans, they sell it, the lifestyle boutique on the corner that sells clothing and candles. They sell and give subscription boxes. And so you have one of those specialty food items that can fit into different channels then, fantastic.
[00:20:32] Sandra Velasquez: Because grocery is the worst, in my opinion, it is the worst because you get forced to work with distributors. The margins are low, you're dealing with like 30,000 skewers in a store versus being in a boutique that has, I don't know, 90 maybe. Right? So I don't ever have to merchandise my product. I don't have those pains that food and beverage founders have when you're selling into a store, like Publix or Fresh Time, or Sprouts, or Whole Foods, where they have thousands and thousands of skewers on the shelf and you easily get lost. So grocery is really difficult.
[00:21:01] Georgiana Dearing: So you talked about your teaching being split. And I know that you're changing a few things, going forward because I get your emails and you're very good at communicating about what's next. So I'm just wondering, what is the next thing that you're going to be doing beyond no Nopalera?
[00:21:18] Sandra Velasquez: With, in terms of, you know, teaching and mentoring. I mean, recently. I started hosting this mentor Mondays series on the Nopalera Instagram channel. And I got a lot of questions from new founders and fellow founders. And a lot of them, they ask the same things which is like, who to get into wholesale? Again, it's like the answer is what I told you. The answer is no, there's no trick about getting into wholesale. How you get into wholesale is that you have to do your homework and study the market because when you go present, you should be asking yourself, why do those wholesale accounts want you?
[00:21:47] Georgiana Dearing: Oh, yeah.
[00:21:47] Sandra Velasquez: That's the question you should be asking yourself like, okay, if you make a ketchup, why does that store need another ketchup? What is it about your ketchup? That is going to bring them an opportunity for revenue.
[00:21:56] Georgiana Dearing: All right. You can flip that and say, is that wholesaler one that's right for your ketchup?
[00:22:00] Sandra Velasquez: Oh yes. A hundred percent always. All stores are not good and all stores are not the right stores for your product but you have to do market research, right? Because none of us create our product or exist in a silo. So this is again where deciding in advance where you're trying to go and then doing the research at those retailers, if I said, I'm going to create a beauty brand and I want to sell it at Target, that would have been a different market comparative analysis because now we're talking to completely different price points. And we're talking about a big box store that has a much bigger beauty section versus Credo beauty, which is very curated and tiny.
[00:22:34] Sandra Velasquez: So again, it's always about researching where you're, the market and the competition that where you're trying to go, and everything is about positioning. So I am now more focused on teaching classes to other product based founders. And again, technically food and beverage founders are product based founders, but grocery is so unique that this is why I have two different email lists. I think that you're probably on my CPG email list where it's just about CPG and grocery, where I have another email list that's mostly to other beauty founders. And if I start talking about MCBs and OIs to them, they will be very confused.
[00:23:07] Georgiana Dearing: Yeah.
[00:23:07] Sandra Velasquez: That does not exist in beauty so it really is two different verticals. So because I'm now in beauty, I'm really focusing on helping those founders now and teaching like COGS and margins classes. That is a big confusion actually that I even see spectrum seafood space from those founders that have started at farmer's markets or at shared kitchens. I've tried several webinars and workshops to specialty food founders who are very confused about what goes into their COGS. And I find that they often leave out labor and I'm like, oh no, no labor is COGS.
[00:23:34] Sandra Velasquez: And where else does that labor cost go? It is your COGS. Like, it is, we're making your product. You are actually stirring the pot. You're either doing it yourself or you're paying someone to do that. That is the cost of creation of your product. That is production. That is COGS. And, yeah, go on.
[00:23:49] Georgiana Dearing: Oh, I was going to say, I think a lot of startups forget about those things, even including it. Okay, so your dad is doing deliveries for you. That's great. But at some point you're going to have to pay for that. So it goes into your finances, what would that cost so that you can figure out what it's taking to get you to market. And those are a lot of startup's pains I think figuring that out.
[00:24:14] Sandra Velasquez: Yeah, exactly. That's why you should just, from the beginning, assume that you have to build in as if you're paying someone else to do everything. You have to build it in to see like, okay, if I'm going to pay a social media freelancer, a couple thousand dollars a month to manage all of this and do my emails, this is how much it costs a month. If I'm going to pay someone to deliver my products and manage that, it's going to cost this much a month. And then you look at that against your COGS and your prices, like, okay, so how much do you have to sell to pay for all of those things, you know?
[00:24:43] Sandra Velasquez: And do that from the beginning, I think that is the financial modeling. I mean, I was very intimidated by financial model in the beginning, too. But even just the basic Excel, where you just have all of your expenses, all of the months of the year going across the top, and just doing a basic kind of, cash flow statement is helpful. but doing it from the beginning is important.
[00:25:02] Georgiana Dearing: Oh yeah. Oh yeah. That is important. I started down one way. We get back to the same things. I don't mean to be asking you to give your whole course in a half day.
[00:25:11] Sandra Velasquez: No, please. No, it's not possible. So I'm happy to share anything.
[00:25:16] Georgiana Dearing: Well, it is wonderful that you decided like you've gone up and you're turning around and you're helping people up. And I think that's great. What inspired that really?
[00:25:23] Sandra Velasquez: I think because there's a lot of great resources out there. There are a lot of amazing people helping founders, I mean, you're one of them, right? Julie Pryor from emerge is another of the startup CPG slack channels. And there's all sorts of accelerators. There's a lot of great resources out there. The specialty food association has a list of co-packers. There's so many great resources out there, but what I specialize in is telling people like the nitty gritty, I don't specialize in high level strategy and not that I couldn't do it, but again, there's already that already exists.
[00:25:53] Georgiana Dearing: Right.
[00:25:53] Sandra Velasquez: So I really specialize in telling people the nitty gritty like, when you walk into the store, this is how you should be dressed, this is what you should say, and this is what you're going to do. And I show them the pictures of how I did it because those are the pieces of information that no one tells anyone.
[00:26:08] Georgiana Dearing: Yeah.
[00:26:08] Sandra Velasquez: And like me sharing my inbox with people and saying, here's how I wrote the buyer. And here is why they wrote me back because of these things that I put into my email because my subject line looks like this. Because I use these specific words that tell them that I know what I'm talking about. And so those are the things that you cannot find on the internet because sales reps and brokers don't want to share their inboxes. And so I'm like, I'm going to be the one that does, because this is the stuff that you need to know. And all these founders are out there going, like I wrote the buyer, no one wrote me back and I'm like, well, let's look at why, show me your email. And I will tell you why they didn't write you back.
[00:26:41] Sandra Velasquez: First of all, no one needs to know your life story right up front. It's way too much information. That is not why you're getting brought into the store. Did you offer a placement deal? What's a placement deal? Okay. So, you know there's a lot of knowledge gaps just like language, right? That these are the tools that I give to founders, that I love to give them because it's literally just all of these small things that if someone had told me we could have gone a lot faster.
[00:27:02] Sandra Velasquez: And when I worked in a beverage startup but everyone in CPG, I mean, I don't want to make, I don't want to say everyone. I shouldn't make that statement but the people like the veterans, right? Or the people that are already on the other side, they have the curse of knowledge. It's kind of like when you go to the post office or the DMV because they work there, they know how everything works and they think that everyone else should too. And it's like, nobody knows how things work. You have to tell them and so, buyers assume that brand founders understand how things work. Brokers assume, everyone assumes that you already know the language that you already know the lay of the land.
[00:27:34] Sandra Velasquez: And unless you've done it before you don't. So that is why I started teaching Distro 101 because I accumulated all of this knowledge the hard way. And I was like, I need to walk everyone through this so that you actually have a fighting chance because before you jump in the arena, you need some, you need to train, you need some tools before you dump in that arena. Otherwise you're going to get beat up.
[00:27:53] Sandra Velasquez: Yeah. I found the buyer. I mean, buyers are still so inundated with opportunities that they can tell right away. Oh, you're not even ready, you know?
[00:28:01] Sandra Velasquez: That's right. Yeah.
[00:28:02] Georgiana Dearing: You're not even ready so I could love your product but you are not ready.
[00:28:06] Sandra Velasquez: Not matter. It does not matter.
[00:28:07] Georgiana Dearing: They have their own targets and goals, and they're looking for partners. They're going to help make their boss happy.
[00:28:14] Sandra Velasquez: Hello. That is exactly what I remind people. Like the buyer's not the bad guy, they have a boss who was on top of them saying, let me see you grow your category. And by that we were talking about money. Right? Okay. So let's be clear about what we're talking about. And so you have to come to them with that opportunity like here's the opportunity to help you grow your revenue in this category, to boost your Q3 sales, whatever. But you have to come from that perspective so that people even start to pay attention.
[00:28:37] Sandra Velasquez: So yeah, I've been teaching Distro 101 for three years and it's always been live and I tried to offer it as a stand alone, do it yourself, and nobody wanted to do it by themselves. Everyone always opted for the live class because everyone wants to talk to a person to get their burning questions answered, which I totally understand. The value of how I've been teaching this class is that it's always a small group of 12 people.
[00:28:59] Georgiana Dearing: You're just such a wealth of information. I could keep talking to you for a long time about what you're doing and sharing stories. But I am going to ask you one question. When I was doing my research, I found a post that was your top 2022 goals, and we're about halfway through. And your goals were to start a podcast to share our stories so, check. I know that exists. Launch new products that expand our current set, check. So you had something being released, a little preview, and expanded our retail footprint.
[00:29:29] Sandra Velasquez: Yes. We did that.
[00:29:31] Georgiana Dearing: You did that? Wow. So you're halfway through the year and you check these off. That's pretty good. Do you still have other things in the pipeline for the rest of 2022 for Nopalera?
[00:29:39] Sandra Velasquez: I should probably update my list. Yeah. So I mean this year, you know, last year was our first full year in business and it was really spent just trying to keep up with how quickly it was growing and it was very stressful. Right? It sounds exciting but behind the scenes, it was really stressful, always not having enough inventory. And this year now is all about really preparing for next year because it just takes that long so for example, I just became, I was an LLC when I launched, like many brands do starts an LLC, and now I've just become a C-Corp because I need to be able to raise money and have people on my cap table. And so this year we're kind of at that moment, kind of like that hockey stick, part of our journey where there's so much opportunity in front of us, I've said no to so many big retailers. I just finished the target accelerator. I'm still waiting to hear how that went.
[00:30:26] Sandra Velasquez: And so many opportunities are in front of us that if they manifest, I will need a lot of capital to take advantage of those opportunities. And I have been self-funding this from the beginning. And by that, I mean, I started with no money. So I think, I just want to be clear because sometimes when people say, self-funded, they started with a million dollars, I started with no dollars. I paid for my branding on a payment plan. I bought things on my Amex and I really have just built as I've gone, like built the railroad tracks as we're moving forward. And you can't really do that when you're really ready to like, take off, you need real capital just to make the inventory alone.
[00:30:58] Georgiana Dearing: Right.
[00:30:58] Sandra Velasquez: I'm sure, like all of your food founders, the money is always in the inventory. The cash flow problem is real. And so this year, right before I came on this podcast with you, I was just working on my investor pitch deck because we're going to need to bring in real capital. I can't just do small working capital loans anymore. I need real capital infusion so that we can really take off in 2023.
[00:31:19] Georgiana Dearing: Oh my goodness. Wow. That's a big move like, go into a co-packer and now we're getting investors. You're really going great guns. That's exciting. And probably crazy-making on some level.
[00:31:32] Sandra Velasquez: It's very anxiety making. Yeah. But dealing with anxiety, I think it's good practice because I do believe that the anxiety never goes away. You just get to a higher level and now you have new problems, and new anxieties.
[00:31:43] Georgiana Dearing: Yeah. Yeah, take a moment and breathe and enjoy where you are.
[00:31:48] Sandra Velasquez: Yes, exactly.
[00:31:49] Georgiana Dearing: Well, I don't want to keep you any longer, but before we go, can you tell the listeners where to find you on all the platforms of Nopalera and you're training?
[00:32:00] Sandra Velasquez: Yes. Somehow I keep too many websites, I'm trying to whittle it down, but somehow I keep making new ones. So the Nopalera website, which is, you know, my beauty brand is at Nopalera.co. So that's C.O. And then for food and beverage brands, my website is Distro Talk. So just like, it sounds like D.I.S.T.R.O Talk - T.A.L.K.com. And that's where my course list and that's where people join the waiting list and all that stuff. And then, I also launched my own personal website recently, so that's my full name, sandraliliavelasquez.com. And that you can get the link from my personal Instagram at officialSLV. And that's where my entrepreneurial newsletter lives and that's who I announced these new workshops like, I'm doing a margin magic. I call it the margin magic masterclass, I'm teaching that on Sunday and then I'm doing a brand building workshop the week after. So yeah, lots of different places to find me. I'm also on LinkedIn. So anyway, yeah. People can find me.
[00:32:57] Georgiana Dearing: Okay. Thank you all. We'll have all these in the show notes. You're so busy. I'm like, oh, I'm thinking I need to say goodbye and let you go. So thank you so much for joining me. I really appreciate it. I enjoyed talking to you.
[00:33:10] Georgiana Dearing: Thank you so much for having me. I hope it was valuable to your community. Thanks for listening. And if you want to learn more about how to grow your own food brand, then click on Grow My Brand at vafoodie.com. If you're a lover of local food, then be sure to follow us. We are at @vafoodie on Instagram, Facebook, and Twitter. Join the conversation and tell us about your adventures with good food, good people, and good brands.