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Hello and welcome to The Advice Line on how I built this lab.
I'm Guy Roz.
This is the place where we help try to solve your business challenges.
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All right, let's get to it.
Joining me this week are Scott and Allie Svensson.
They are the co-founders of the fast casual pizza chain Mod Pizza.
Scott Allie, welcome back to the show.
Guy, great to see you.
Great to see you, Guy.
Thanks for having us.
Great to have you back.
So both of you were on the show in the summer of 2023.
You told the story of how you created Mod Pizza.
And if you haven't heard it, Scott and Allie were high school sweethearts.
After college, they moved to London.
Scott worked in finance, but then he got bored with it and they decided to start a coffee
shop in London, which turned into a massive business called Seattle Coffee Company, which
they sold to Starbucks and then eventually came back to Seattle, where they're from,
and started Mod Pizza, which today has around 500 stores.
It's such an awesome story.
I loved having you guys on.
We have lots to talk about, of course, especially a bit of news around Mod.
I know that recently it was announced that Mod Pizza was acquired by the elite restaurant
group. It's an investment group, I guess, to help avoid potential bankruptcy.
And I'm curious, you know, because Mod is such a great business and was operating as
such a great business, what happened?
Was it inflation?
Was it the cost of goods?
Was it too rapid of an expansion that created some of the challenges?
Yeah, Guy, it's a great question.
And I think to summarize, it was a 16-year journey for us.
And the first 12 or 13 of those was incredibly exciting, growth-filled expansion across
the US. We were built as an experience to have on-premise.
And we entered the pizza industry, did pizza a different way.
And then when the pandemic hit, it really forced us to change how the business operated.
And it also dramatically impacted our growth strategy.
We had been expanding across the country very rapidly to be a first mover.
And then we pivoted very intentionally in about 2018 from first mover into market infill.
And so we started to fill in all the markets that we were in, raised a bunch of capital
in 2019 to execute that phase of our strategy.
And then in 2020, that basically came to a halt while we moved to surviving the pandemic.
And as we came out of the pandemic, we made several attempts to get back into growth mode
to fill those markets in and to finish the strategic plan that we had had.
And there was just a number of challenges that came out of it, whether or not it was
staffing crisis or supply chain issues or inflation.
It was a combination of those things as we were trying to come out.
And then ultimately, the inflationary spike that led to a lot of price change in the industry
over the last few years started to manifest in terms of consumers eating out less or having
less occasions, less restaurant visits. And then we got into a dynamic where we needed
to raise capital, which we knew we were going to. It just accelerated it and put us into a
position of either needing to raise capital or sell the company and we ended up selling.
And the good news is ModPizza will survive and thrive. You've got all these locations
around the country. And so Scott, you're no longer the CEO, but will you stay as advisors
for a short period of time?
We're still connected with the company. I think that's a story that's yet to be told in terms
of exactly what role we play or how we might be able to help. Things have changed quite
substantially. And we'll continue to change. I'm sure Elite has a vision for where they're
going to take it. It's a concept that people love. It's an experience that people love.
But the future will no doubt be different than the past.
Well, Scott and Allie, the two of you have scaled two chain businesses, one in coffee,
one in pizza. We've got callers today who I know have lots of questions about things like
expansion and building brands. So a lot of questions. I'm sure we'll have a lot of,
hopefully, good advice for them. Let's take our first caller.
Good. Great.
All right. Hello. Hello, caller. Please introduce yourself. Tell us your name,
where you're calling from, and just a little bit about your business briefly.
God rahaz, Allie, Scott, I'm so happy to be here. My name is Evan Byrne from Utter List
Plant Based Pizza.
Hi, Evan.
We're located in Richmond, Virginia, and we're making the world's best bacon home vegan pizza.
I love it. Okay, cool. So tell us a little bit about how you got into the vegan pizza business.
Well, we've had a restaurant up until recently, so I can certainly identify with a lot of the
challenges that Scott and Allie have faced.
This was a pizza restaurant?
Pizza restaurant.
Okay. In Richmond.
In Richmond. Had it for about six years. We actually just closed on the sale last week.
Congrats.
Thank you. So this is a pivot. We noticed that we had a huge vegan clientele. We actually
geared it in the beginning. We wanted to have something be inclusive and have
something for everybody. Richmond has a huge vegan community.
So we started offering vegan options, and we brought on someone who was making a local vegan
cheese, and they were on our menu. And then every time they were not the most reliable vendor,
and every time we would be out of the vegan cheese, we would notice a dip in our sales.
So it was really just self-preservation. I started kind of reverse engineering it and
sort of came out with my own version of it, and it was a lot of tinkering around in the kitchen.
We came up with something we were happy with, and it just kind of took off.
We've just found that it's a much easier business, and it seems like it's got much
more legs than the restaurant.
Cool. And are you in grocery stores right now, at least local stores?
We're in about 15 stores locally. So there's some mid-size health food stores. Richmond has a big
market community, so we're in tons of different markets around here. And then we just recently
got some regional distribution in the southeast. Nice.
Thank you.
And they're frozen. They come frozen.
They come frozen. That's right. So it's a cashew-based cheese. We make the dough by hand.
It's naturally leavened, fermented for 24 hours. We use fresh produce. And then we parbake the dough,
freeze it, put the sauce on it, shred the cheese on it, top it, and then freeze it again and repackage
it. I love the name, Utter List.
Yeah. And then what's your question for us today?
So I think my question is, we're Richmond famous. People love our pizza around here,
but how do we expand our footprint beyond our local market with limited resources?
AKA money, essentially. How do we get our pizza in the hands of people outside of our local market?
Because generally, once they try it, they love it.
All right. Scott, Ali, maybe answers to Evan's questions or maybe some questions for Evan before
we tackle his question.
We're big fans of a grassroots, scrappy approach to things.
Yeah. So you're doing it the right way, I think.
Yeah. And congrats on building a restaurant and then pivoting into this. I love that entrepreneurial
ability to see the opportunity and to pivot. I'm curious, with the way you've been distributing
the product to date, it sounds like you just got some slightly bigger distribution opportunity.
Maybe you could share a little bit more about that.
Yeah. It's in the southeast. So it's a smaller regional distribution company called P10,
who we love. And distribution, from what I've learned, is kind of chicken or the egg, right?
You can't get distribution without these key accounts, but you can't get key accounts without
distribution. So we feel really fortunate that they actually approached us, they heard of us,
and they added us to their repertoire. And then also, it's hard to find frozen distribution.
Many times, I've cranked down the AC in my car and driven as fast as I can to
deliver some pizza. Entrepreneurial journey. Right, yeah. It's tough in the summertime.
Whatever it takes.
But anyway, they've been great so far. We are part of a catalog of other products that they
offer, right? So how do we stand out among those, is it going in person to do events,
to get the pizza in the hands of people? How do we transfer the buzz that we've
generated in Richmond to these other places and get them to sort of dive in? It's hard to get
your name out. Do you do direct-to-consumer? No, we don't.
Do you do any mail order, or online, or subscription, or otherwise?
I think the turnoff for us with that has just been that it's a frozen product,
so the shipping cost is astronomical. I noticed that you promote the fact that
your vegan meat topping beehive, a product that I hadn't heard of, but boy, when I started to go
down that rabbit hole, they are a real thing. And they have lots and lots of like 22,500 followers
on their Instagram, I think. And they promote a lot of pizza and a lot of product using cheese
like yours. Have you discussed with them, having them help promote and bring you into their venues
where they are? Yeah, absolutely. I think that that's definitely in the cards. We've been
kind of going through a lot of change the past couple of weeks with the restaurant sale and
everything. But that was kind of the thought process when we got into business with them,
was like, we'll do some co-branding. It'll be beneficial for both of us.
They're a really well-known company, and their vegan proteins are great.
And if they endorse your product, that's gold. And it looks like Beehive is based,
I think, in Nashville. So again, depending on how deep you can build out that partnership,
there's a logic to possibly create some presence there with them. And some of these publications,
when you just do a random search on the best vegan frozen pizza in the country,
these publications, VegOut, VegNews, they are intensely focused on exactly this. And they list
a lot of pizza brands that aren't yours. And I would use that as an opportunity. I would contact
those reporters and say, I see that you listed these 12 brands as the best vegan pizza I'm
sending to your office this week, one to try because you need to add a new one to your list.
I mean, those are reporters that are already studying this stuff.
Yeah, that's great. We did have an article on VegNews just by chance. So yeah,
that's definitely somebody we should reach out to.
One of the things we found in our experience with MOD is that the vegan community
was strong and outspoken. And while maybe small as a percentage of our overall customer base,
they were very influential. And a lot of people, when they're talking about building a young,
emerging brand like yours, they talk about connecting with that core customer, that community
that you can build. Man, that vegan community is a prime one for you to tap into. And it does come
down to all the things you've talked about, the quality of the product, how differentiated it is,
and for your getting out in as you explore moving into new markets. And my strong advice is,
you've got, it sounds like a very strong following in your home market of Richmond.
I would take advantage of that and make sure that you're kind of leveraging it and moving
almost in concentric circles. What's that next market where you can take advantage of the strong
following and then move into that next market. Growth is seductive and it's exciting, but man,
it's better to do it the right way, be slow and deliberate about it as opposed to be measured.
Quality growth over growth is a really important differentiator, particularly for someone like you.
It sounds like this is your business, you own it, you have to fund the growth, you have to manage it,
and therefore just being really thoughtful about how you step through those next few chapters.
I wonder if you're in Richmond, and let's be frank, Richmond is a small market,
but you're three hours from one of the biggest metro areas and one of the most influential
metro areas in the US, Washington, DC, home of Kava, Sweetgreen. So many brands have really
started and scaled out of that city. And it's really been a test market for a lot of these
small startups to grow and to become national brands. And I wonder whether there's a world where
you go there and you go to farmers markets there and you have a mobile pizza truck and you're
making these there. The DuPont circle farmers market is influential, you just get more attention
than you would in Richmond. Sampling, sampling, sampling.
Yeah, I think that's a great piece of advice. I mean, we haven't really explored the Washington,
DC market yet. It's a little daunting, but that's definitely something to consider.
I agree with Guy. Thinking about what's the bridge from Richmond to the greater DC metro
and how do you kind of build up to that? And who are those key influencers? Who are those
key retailers? And it feels like that idea that Allie mentioned of what's the way to get the
product in people's hands and into their mouth? Investing in a mobile food truck that you can
actually take the product would be super cool. True. I haven't really explored DC and then
I could see having some legs where I can maybe get somebody's ear there. So that seems like a
really great piece of advice. And Evan, in the retailers that you're currently in,
do you do tasting events? Do you get into the stores? We do.
Yeah. Thank you. Because I would really focus on making sure that the retailers that are currently
supporting you are being really successful with your product and that you're nurturing those
relationships. Taking that data then on the sell through in those stores to the next retailer.
Because that's when you eventually have that meeting with Whole Foods. If you have all of
that data and that experience about how once you get the product on the shelf and in consumers'
hands and in their mouth, how they respond to it, that's the data I think that they're going
to respond to. And that might be the breakthrough that gives you the opportunity to get into that
one store and then eventually more. But making sure that those retailers that you're in,
it's so easy. Again, this gets back to the conundrum of growth. Once you focus on growth,
then your time and effort and energy ends up being focused there as opposed to in your
core business. And making sure that's always a struggle. That's a tension.
In a small business like yours, where it's really you getting pulled, making sure that you're not
neglecting those current retailers and making sure that they love you and that they're big
advocates because that's what's going to feed the reputation and the demand then for the product
going forward. The most powerful marketing you have is getting your product into people's mouths.
Gorilla pizza drops.
Yes, exactly.
Yep. Awesome. The brand is called Utterless. Evan Byrne, congrats on launching this. Good luck,
man.
Thanks so much, Joan. I appreciate it.
Nice to meet you.
Nice to meet you, Evan.
Good luck, Evan.
Thanks.
Fun. I'm not eating pizzas very often now because I'm on this annoying diet, but I do love it.
As you guys do, you love pizzas, but we can't eat it every day.
Although, maybe I shouldn't say that because we want people to eat Mod Pizza every day.
Sure.
Yeah, no, and he's right on it. Health, lifestyle, diet, those are such powerful
trends. If he can develop a really craveable product that caters to that very strong and
vocal community, man, that's an exciting place to be.
How did you guys do with vegan pizzas? Presumably, did you have a vegan cheese
option or was it just like cheese-less?
Yeah, we had a gluten-free and a cauliflower crust option and then we had vegan cheese.
We had a lot of strong customer following from people that had dietary restrictions or preferences.
And by the way, that all happened very organically. We did not market that. We
wanted that.
And once they discovered it and made Mod a solution for their vegan needs, they were big
promoters of it to their community. And that's why I think in talking with Evan and really
making sure that he is very close to and building that relationship with that community is just key.
Okay, next up after the break, another caller with another business challenge.
I'm Guy Roz and we're answering your questions right here on the Advice Line on how I built this lab.
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Welcome back to the Advice Line on how I built this lab. I'm Guy Roz and my guests today are Scott
and Allie Svensson, founders of Mod Pizza. Uh, Scott and Allie, let's, let's say we take another
caller. Hello caller, welcome to the show. Hello, how y'all doing today? Hello, hello, please introduce
yourself. Tell us where you're calling from and uh, just a little bit about your business.
I'm Zebi Carney. I'm the owner of Eugene's Hot Chicken. I'm calling from Birmingham, Alabama.
Hey, Zebi. We are a hot chicken restaurant, uh, catering company, and food truck. Uh, we started
in 2015. Uh, we got two restaurants and three food trucks and we got two sauces in a couple local
stores here in Birmingham, Alabama and we're looking to expand. So Zebi, tell us how you got
into the restaurant business and how you came up with this idea. Yeah, so I'm originally from
Nashville, the home of hot chicken. I've been in restaurants since I was 16, 27 years I've been in
restaurants. I kind of worked my way up through restaurants. I went back to school to get my
bachelor's in business. Um, yeah, it was no hot chicken in Birmingham and it was, it's such an
incredible food town and I was, uh, you know, kind of tired of corporate America and I was just looking
to do something else. I always wanted my own little restaurant and I was just trying to add
value to the great food scene here in Birmingham and, you know, I was like, hot chicken was perfect.
So I started doing pop-ups. They became successful and then I purchased a food truck and we just kind
of grew from there and it's all been organic growth. You know, we kind of outgrew our connoisseur
kitchen we was working in. So then we opened up a restaurant and the restaurant just kind of took
off from there. Wow. Nice. Cool. Zebi, tell me about the name Eugene's. Who's Eugene? Oh, so Eugene's
my father's middle name. You know, he passed when I was 17 years old and just a way to honor him. I
named the whole company after him. Bless you. Eugene's had that old school southern name to it
that I wouldn't get out with Zebi. Are these his recipes by any chance? No, they're all my recipes.
I created them in our apartment. Wow. Amazing. I'm looking at your menu. It looks delicious.
I can't wait to dive into a little bit about your process. Tell me about your question. What's,
what question you have for us today? Yeah. So, you know, all of our growth has kind of been organic
growth. But, you know, we're looking to grow more as more brands come about. How do you handle
fast growth and how do you scale? There's a few thoughts on that. Got it. Okay. What's your
question in a moment, but before that, Scott, Ellie, any questions for Zebi? Yeah. And congrats.
It sounds like you've had a lot of success and man, you are in a really good space. If you were
to look across the restaurant industry over the last five years, and I'm sure you know this,
being in chicken and chicken sandwiches, there's no better place to be. Massive. You just can't
get enough of it. You've seen all that what's happened with, you know, the different brands
who brought in chicken sandwiches. And it just seems like the, you know, as long as we don't
run out of chicken, we're going to be, you'll be in good shape. We just added a vegan chicken
sandwich to the menu as well. Wow. Okay. There you go. So I take it that you've financed all of this
and this is all company owned today. Yeah, I have. And you know, that's one issue with growing,
you know? Yeah, for sure. I don't want to stretch this out too thin. Yeah. Well, congrats. I mean,
that's, it's commendable that you've done it all on off the back of, you know, your own hard work
and incrementally grown it. And right now you are just in Birmingham. That's right. The three, the
two stores in the three foot trucks. That's correct. Yeah. And so I take it that there is a desire to
want to take this great menu, this great brand you have and grow it. Yeah. So we bought a new
food truck this year, which we call a travel truck. And we've just been traveling in different
markets. We just got back from Nashville for four days on Sunday, because if you're going to do hot
chicken, you got to do it in Nashville. Plus it's a bigger market. And you know, I feel like we can
scale quicker if we get to Nashville. So we've been taking our food truck there. Great way to
test it too. Yeah. And it's been great. So Zebi, it's funny, you're smart. You're smart because
my first piece of advice was, if you're going to test new markets, you've got a food truck,
it's mobile, it's a low cost way of getting the product in people's hands and seeing how they
respond. And it sounds like you've done that. So you've done it in Nashville. Have you done it
anywhere else? We've been to Atlanta. We've been to Nashville a couple of times. Yeah. We got a hot
chicken, not a hot chicken, a fried chicken festival coming up in New Orleans in October. So
I'm pretty excited about that one. And the response from customers in Nashville and Atlanta was
positive. It was real positive. You know, people tell them it's great, but it's a little bit
different. So that's awesome. Just to hear it because we're not like anybody else, you know,
it shows back around and it shows background, you know, and growing up with hot chicken,
I want it, I don't want it just hot. I want to add more flavor to it, you know,
and it's been, it's been great. What's the population in Birmingham?
Roughly, you know, if you add it in the suburbs, it's 33 municipalities, I say around a million
people. So the first thing that I would ask you to consider is, you know, in our industry, there's a,
there's a formula that is the more penetrated you are in a market, the more well-known your brand,
and generally the brands that are more well-known perform better. So making sure that you really
feel like you've, before you move into a new market, that you feel like you've really taken
advantage of your home market. Yeah. And, and I don't know, I would tell you in a market with
a million people, I would be surprised, if you couldn't have 10 or 12 or maybe even 15 points of
distribution, whether they're food trucks or, or stores in Birmingham. And I'll tell you,
it's exciting and it's seductive to go to that new market. But man, it does bring a whole series of
challenges and complexities that at the right time are worth taking on. But man, before you've
really maximized the opportunities in your home market, I would just strongly encourage you to
to do that first. And then with a really strong foundation, then think about, okay,
how do we want to extend into a new market? And then there's all types of questions that be around,
how much risk do you want to take? Meaning, do you want to do it all company owned,
meaning you're going to continue to finance it all? Or do you want to bring in partners? Do you
want to franchise? And, and this is another challenge with growth. As soon as you start
focusing on growth, particularly if it's in a new market, you got to travel, you got to hire people,
you got to bring, now you're not focused on your core business, you're focused on the growth,
because there's only so many hours in the day. And that's when people get into trouble, because now,
as opposed to focusing on how do I elevate and improve the quality of what I'm doing? How do I
manage my costs so that I can keep my prices where they need to be? How can I take care of my team
so they're delivering a great experience? You start focusing on the fact that, well,
I had a general manager in Nashville and they left and I got to leave, I got to go to Nashville
for two weeks and I got to stay in a hotel and that's going to cost me. And you just, you end up
changing your priorities and your focus. And so, man, I think the more you can really own that,
own your home is a mantra that a lot of people in the industry talk about. Own your home,
build a fortress, because if you can become the loved local brand in Birmingham, and if you end
up having six, seven, eight, 10 locations, there's a loyalty that develops with those iconic,
local, we have many, we have several of them here in Seattle, which have been around for 50, 60, 70
years. And the value of the brand is almost more now than the value of the business. Then you can
decide to do anything. You can go franchise it. You could grow into a new market. You're doing
it from a really solid foundation, or you can just build it up, have a really easy business to run,
and then eventually sell it as this iconic local Birmingham institution.
Zebby, quick question on that. You mentioned that you have sauces that are distributed in
groceries. So that's a huge deal. How did that come about?
Yeah. During COVID, we just am looking for another way to pivot. And we're a scratch
restaurant. We won a few fast cars or scratch restaurants. And people, they love that comeback
sauce and they love the white sauce. And I was just figuring out what else could we do with it?
We end up bottling it and putting it in grocery stores.
How do they sell?
They're doing well. We're in a few local pickle wigglies. But that's another thing,
trying to figure that out. I'm trying to get somebody else to take care of their part of
the business where I still focus on growth of the restaurants. But how do we handle that growth and
that skill? What key performance indicators do you look for to measure success?
Yeah, Zebby, it's a great question. I'll give you a few which are
pretty typical in our industry. The first is average unit volumes. Everyone wants to know,
what are your AUVs? Secondly, is your store level contribution? How profitable is the store? And
that's going to be obviously a byproduct of where your cost is sold, where's your labor and your
occupancy costs and other operating expenses. And people want to see that a couple of things,
that your revenue is at least two times your cost to build and open a store, your capital cost,
and ideally closer to three, but at least two times. So if it costs you half a million dollars
to open a store, they want to see it at least a million to a million and half in revenue.
And then a 20% store level contribution, store EBITDA, store profit, is a really important
marker. Sometimes people are in the high teens, best in class brands, Chipotle and Kava and others
are in the mid 20s. So being at that 20% level or higher is really important. And then frankly,
the other key metrics that you've got to keep track of are how your customer is feeling about you,
all of those, the customer feedback, how's your team feeling about you? Because you know,
turnover is expensive, both in terms of cost to hire people, train them, as well as just the
experience they deliver. So I'd say those are probably the most important metrics to track.
Yeah. Thank you.
Zebi Carney of Eugene's Hot Chicken in Birmingham. Thanks so much for calling in. Good luck.
Thank you all so much for having me.
Yeah, congratulations for having me.
Yeah, it's exciting. Good luck.
I just, I love a fried chicken sandwich, I gotta say.
He's in the right spot. And yeah, he's been doing it for a long time. So he clearly,
he knows what he's doing. He's clearly developed a product that people love.
Yeah. And you just see in the last, as you mentioned, the last several years,
you know, Raising Cane's and obviously Chick-fil-A. And I mean, even the chicken sandwiches and
Popeyes, I mean, they've just, it's exploded. I mean, you see, and Dave's Hot Chicken,
you see these other chains coming up. I mean, that category has just exploded.
Exactly.
All right. We're going to take another quick break, but we'll be right back with another
caller. Stay with us. I'm Guy Roz, and you're listening to The Advice Line,
right here on How I Built This Lab.
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Welcome back to The Advice Line on How I Built This Lab. I'm Guy Roz,
and let's go ahead and take another call. Hello, welcome to The Advice Line. You are on with me
and Allie and Scott. Hello, who's this? Hi, everybody. I'm Christiana. How are you?
Hello, Christiana. Welcome. Tell us where you're calling from and a little bit about your business.
I'm calling from Los Angeles, California, and I'm the founder of Valor Vividas. Valor is a tequila
company that's committed to really creating a brighter future for the tequila industry through
fair and sustainable practices, both for the people and the natural resources that bring
this beautiful spirit to the world. Cool. When did you start the business?
We formed the corporation in May of 2022 and launched the product in July of 2023.
And you're making it in the United States or in Mexico?
Tequila is just like champagne. In order to be called tequila, it has to have a designated
region, and 95% of tequila comes out of the state of Jalisco, and then there's a few other
municipalities within the country of Mexico. But yes, we produce out of the town of tequila
in Jalisco, which is where the name tequila came from, is actually the town.
Cool. Tell me a little bit about your background. Have you been in the spirits business for a long
time? No, not at all. My background actually is in corporate responsibility and sustainability.
I worked for the Walt Disney Company for seven years leading our environmental and science
education portfolio across the enterprise. And then I went to an environmental nonprofit in DC,
and then in 2019 decided to start my own company called Do Goodery, where we consult with major
corporations like Amazon and Disney to help them be better corporate citizens. And then one of my
mentors said, you know, Christiana, you spent your entire career helping companies try to do better.
Maybe it's time for you to start your own company so you can model what it looks like to create a
responsible company from the very beginning. And how did you land on tequila? Which, by the way,
is the only spirit I'm drinking now because it doesn't spike blood sugar. Yes. At least for me.
Yes, I'm so excited to hear this. It really does. It's amazing. I just had some last night
because all my friends are drinking whiskey and I can't drink it. Tell me how you decide to get
into tequila. So I am the daughter of immigrant parents. And so I spent my time as a kid living
between California and Salvador and Mexico. And tequila was my very first drink in fourth grade.
Wow. In fourth grade. Yes. And my sisters get so mad at me for telling the story because they're
12 and 13 years older than I am. It was just a little sip of a margarita. But
tequila has had a really special place in my heart since I was little, appropriately little.
But, you know, I grew up with a family, you know, that sort of always took care of people and being
and growing up in developing countries like El Salvador, you know, you got to understand
like the deep disparity in labor. And so tipping and taking care of people was always a really
important ethos to our family. And I was in in Mexico for a New Year's trip and learned a lot
about tequila and the real inequitable practices in the industry. It's a multi-billion dollar
industry. It's one of the most labor intensive industries in the world. But the money stays up
here. The money stays in the UK and it doesn't go back to the people. So I came back and it's also
really exploitative in terms of not the people, but also extractive for the environment. So came
home and I said, you know what, tequila, that is what I'm going to do. And I don't know, one door
just kept opening and opening and opening and opening. It was kind of a natural thing. Amazing.
And tell us, well, which question is. Yeah. So, Allie and Scott, I listened,
I did a lot of research on you guys and I listened to your how I built this episode. I was in tears
like 19 times. I'm like, they put people first, they were able to do this. And, you know, because
there have been so many times where I'm like, am I insane? Like, is this crazy to think that we can
do this? And, you know, people are demanding more and more that companies be more responsible,
but not quite yet at a higher price point. And so how do we get consumers to demand more of
companies like ours and everybody? Because supply chains rarely begin here in the U.S.,
but we get to benefit from, you know, inequitable labor practices all around the world.
Scott, Allie, you can answer the question or ask your own questions, please.
First of all, congratulations. What you're doing is really exciting, cool. And it's so authentically,
I just love that your mission and your purpose is just so fundamental to why you're doing what
you're doing. So that's really great to hear. Is any other tequila brand in the world focused this
way? No. Great. Okay, great. That was my question. Yeah. And I would just say, first of all,
congratulations. I love the story. And I just popped onto your website. I think it's important
to note, dedicating 10% of sales is not trivial. I mean, that is a serious commitment. Serious.
I would suggest that you are taking the position of building a company in order to promote these,
which is spectacular. Our journey with MOD was similar, different but similar. And, you know,
I think a lot of people try to wrap social impact and, you know, being a good corporate
student and dedicate teeny little bits of resource and try to get the benefit. And it feels like
you're doing exactly the opposite. Yeah. What's your price point? So our Blanco is $79.99 retail,
and our reposado is $99.99 retail, which by the way, when we launched it was $1.19 for the Blanco
and $1.35 for the reposado. But we just we pigeonholed ourself by doing that. So we took a big plunge
and we're actually getting ready to do another price drop. I'm sort of taking the Uber approach
where, you know, we'll probably break even with this next price drop. But for us, like velocity
and just getting this product in front of people is really important because that's our biggest,
that's our biggest roadblock is price. Alli and Scott, I'm curious. I mean,
and I'm going to play devil's advocate here for a moment, because I think that the 10%
is incredible. But I wonder whether, again, we talked about this with Mod, you know, whether
consumers ultimately care about that to the point where they're going to choose that product, right?
Because I mean, there are, I think about the coffee industry, and I know La Calome and a lot of other
coffee brands do a version of this where they really focus on sourcing and making sure that
they're buying it from the farmers. I'm not convinced based on my conversations on the show
and around the country that consumers care as much as we hope they will, right? And so I wonder
whether there is a, that approach is really the way to sell the tequila. Yeah. So I would just offer
that, first of all, Christiana, we totally applaud you because I do think, as you said,
that consumers are starting to become more aware and are starting to appreciate good corporate
citizens who are building businesses the right way. But I agree with Guy, I think you are in
the vanguard, you are a pioneer. And, and, and I don't think consumers yet are necessarily
voting with their pocketbooks, the way they do with their conscience, the way that they might
talk about it. Now, that's not to say that you can't be one of the pioneers that prize it open
and finds a way. And Guy, you gave a few examples. The one I would offer is Tom shoes. And so,
Tom's that one for one model. I do, and Ali could speak more articulately about this and I,
but I do believe consumers at the time when they went in to buy that type of shoe,
they cared. They did. They did. They cared enough to buy that product. Yes. And I do think
you have a similar opportunity. It all comes back though, to the product. People have to love your
product and, and you're selling a premium product. So you're selling it to people who are maybe not
quite as, as price conscious or as price sensitive as others. And I do think if you can find a way to
communicate with them, educate them and get into their conscience that this is not a matter of you
just having a token, you're giving 10% of sales. I think a key word is education because I have to
gosh, ideally you almost want to find some journalists or a publication. You need people
to help do some sort of an expose and help educate us as consumers, our country around
this, this industry and the, and the practices that either are good or bad,
because as soon as there's more discussion or education around it,
then people will ask the question, well, who is doing it right? What are my options? And if you
can get people asking those questions, you're going to be the only one standing there saying,
I can, I, I'm doing it. And so education in as much as you can help educate people,
I think would be huge. I might also suggest that you study Starbucks and what they did
years and years ago when people start, nobody knew anything about people who they like drinking
Starbucks coffee, but nobody knew anything about ethical sourcing of coffee beans. Nobody was
talking about that. And I think Starbucks did a phenomenal job years ago, starting to help us
consumers racing and getting our latte. And they started to see bits of information and education
in their, in their locations that started to discuss this. And I think that can help get people
made more aware of what really the issues are. That's where you got to get it to the point where
people are asking or curious and boy, you're, you're then you're the person to have the conversation
with. It feels like there's an opportunity as well. If, if, you know, this is a type of product
and it's an industry in particular, where influencers and people who have, I'm, I'm forgetting
the name of the brand that was started by the famous movie star that has gone out of my head.
George Clooney.
Yes.
Oh, the Casa Migos.
Casa Migos.
Yeah.
But there's a great example of a product that blew up because of that, that affiliation. I would be
surprised if you couldn't find some very, very influential influencers who would buy into your
mission and buy into maybe partner with you to say, we're going to get this story out. We're
going to help you promote this brand in a way that's much more efficient than just buying
marketing or what have you or media. That's the type of thing that's going to just elevate the,
the brand, elevate the story and start to trickle down this message that, Hey, this is a brand
that's doing things differently. A lot of people love tequila. And, and I think if you can tap into
that, that Venn diagram of people who are loving tequila and who are, love the fact that you're
doing it differently and, and obviously ultimately need to love the product.
Right.
I, I'm going to just, I'm going to push back a little bit. I think that all of that advice
is really sound, but there's one thing that I still think is important, which is the product.
And from what I understand, looking at your website, Christiana, is that you, there's
something slightly, somewhat unique about your tequila, right? It's mature agave and water. And
that's it. Nothing else.
Really clean.
That's it.
Very clean. I would push that because, because, you know, the, the, the mission side is going to
be critical and you're going to be pushing that and you're going to be explaining that. But,
but the flip side is, you know, you want people like me who are on keto diets who want to have
a drink or people who are going to CrossFit gyms or people are going to Orange Theory
who want to have a drink and, and, and, you know, that nobody should drink in excess, but
I'd love to just do you, for you to double down on that clean mature agave plus water.
Something that really evokes this idea that, that this isn't just another tequila. This is the one
you should go for.
And who are the most high-end bartenders these days that are, you know, introducing people to the,
the best of the best you want them to, I mean, if the product is so great and it's so clean
and it's helping build community and solve real problems, I mean, that's a wicked combination.
And if you have bartenders, you know, the ones that people are writing articles about,
or people are building concepts around, making sure that they are your, your ambassadors,
I think would also help. So much of it, I think does come down to education. People just don't
know until they know. And that's a big job. You can't do it on your own.
I also think there's an opportunity, you probably are already doing a version of this,
to really push us with women.
Yes. Being a women owned brand is something to trumpet as loudly as you can. You know,
I think about the Adeline, the wine, you know, with Cameron Diaz's brand. I think people really
respond to that and you can have your, your version of that. I think consumers are open to
it and respond very well, but it's a matter of just getting out there for them.
Yeah. Oh gosh, you guys. Thank you so much. This is all, you guys are amazing.
You know, we are a very tiny brand. We don't, you know, we're actively going to actually raise
real capital now because to do all of this, it takes so much money. And unfortunately,
bartenders, a lot of them are paid to play now and influencers. And I get it. They have to make
their money, right? We just don't have like, we're too busy. We say 10% of the bottle, like
900% of the bottles are going to the work that we're doing right now until we get this work off
the ground, you know? So it really is like our advocates that have been wonderful and haven't
charged us to promote us. And Walt Disney World actually brought us in and we're the first female
added a free brand for Disney ever to. Congratulations. That's huge.
Thank you. Thank you. Yeah. It's been an exciting, it's been an exciting ride, but I'm not joking.
When I listened to your episode, I was, I felt very hopeful, very hopeful, very, very hopeful.
Awesome. Christian Martins, the brand is called by Lord Tequila. Congrats. Keep us posted. We're
watching. Congratulations and best of luck. Take care. Bye. There seems to be a theme from almost
all of the entrepreneurs that we got to talk with today. They're all at the right time in the right
place in terms of a product or offering something that is right now. So whether it's, you know,
chicken or, you know, just the vegan movement, tequila, you know, the time is now it's, it's very
exciting. And I think there's a lot of that we can be very hopeful for all of them. For sure.
We could have a great meal. We could. We could for sure. I would go. Scott and Allie Svensson,
co-founders of Mod Pizza. Thank you so much for joining me on the Advice Line. It was great to
have you guys back on the show. So fun to be with you again. Yeah. Great to see you again and great
to be a part of this. And by the way, if you haven't heard Scott and Allie's original How I
Built This episode, you have to go back and check it out. You can find a link to it in the podcast
description. And here's one of my favorite moments from that interview. We had never worked in
retail. Our qualification was the fact that we had been customers of the thing that we wanted to
create. Yeah, it's interesting. I think one of our strengths at the time was the fact that we didn't
know what we didn't know. A friend joined our board early on and the week before our first store
opened, he said, listen, I decided to do this because I really like you two. And I wanted to
make the process of failure less painful for you because this is never going to work.
Thanks so much for listening to the show this week. Please make sure to check out my newsletter.
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This episode was produced by Catherine Seifer with music composed by Ramtina Rablue. He was edited by
John Isabella. Our audio engineer was Sina Lefredo. Our production staff also includes Alex Chung,
Karla Estevez, Chris Messini, Devin Schwartz, Elaine Coates, J.C. Howard,
Kerry Thompson, Neva Grant, and Sam Paulson. I'm Guy Roz, and you've been listening to How I Built
This. If you like How I Built This, you can listen early and ad-free right now by joining
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