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And make sure to tell us how to reap experience in sports and healthy eating helped Mark Sisson grow Condiment brand Primal Kitchen from nothing to a $200 million exit in just four years.
Mark Sisson took a very big bet on mayonnaise, a $6 million dollar bet.
The money came from a line of credit he needed to finance an idea to make a paleo and keto friendly brand of condiments, ketchup, salad dressings, barbecue sauce, and of course, mayonnaise.
But to get the money, he had to put his life savings and his home on the line as collateral.
And he did all this in his 60s, a time when lots of people start to dream of retirement.
The brand was called Primal Kitchen, and the gamble would pay off in a big way.
But the success of Primal Kitchen was built on the trials and errors of Mark's previous ventures.
He ran a painting business, a frozen yogurt shop, was a personal trainer, sold supplements, hosted a failed TV talk show, and then in his early 50s, Mark adopted a new diet, grain-free, dairy-free, mostly meat and vegetables known as the Paleo Diet.
He started blogging about it, and eventually his blog became popular among people who were interested in paleo diets.
The community Mark cultivated through that blog would become the readers of his books, including the Primal Blueprint, and eventually they'd become the first customers of his paleo-friendly mayonnaise.
Mark was born in the early 1950s, and he grew up in a small fishing village on the coast of Maine.
By the time he got to high school, he was a standout track athlete.
And he got the opportunity to attend a prestigious prep school in New Hampshire where, at first, Mark struggled to fit in.
But that all changed one summer when he signed up for an outward bound course.
I guess you would describe it as a survival course.
And it was a 28-day adventure that was really rigorous.
There was a four-day solo where you spent four days alone on an island with minimal gear.
You were put in a boat with 12 other people that you'd never met before and tasked with navigating that boat.
By the way, this sounds like a West Anderson...
This sounds like Moonrise Kingdom.
Yeah. So it was a seminal moment for me.
That summer transformed me.
It was amazing. And I came back from that experience, they called it, around the island.
But it was all on the rock-bound coast of Maine.
So it was really a very rocky kind of seven-mile track.
And I won that event and set a record that stood for a number of years after that.
So when I got back to Exeter for my senior year, my grades picked up.
I was captain of the track and the cross-country teams and really came into myself and came into my confidence, not just as a person, but also, certainly as a runner.
And then that confidence carried through.
I went to Williams College.
I spent four years at Williams.
And you were like an elite runner while you were there.
I think at a certain point you qualified for the 1980 Olympic trials, not that long after you graduated.
But from what I've read, when you were at Williams, you weren't super focused on becoming a professional athlete.
You had this whole other career that you thought you might go into, right?
I did. What happened was I had been a pre-med candidate at Williams.
I got a bachelor's degree in biology.
And I was on a pre-med track until my senior year.
I put myself through Williams as a painting contractor.
So in summers, I would paint houses and make enough money to pay for my tuition, room and board.
Which you could do back in the 70s.
Unfortunately today you can't because of the inflated cost of college.
You could do that in the 70s.
Absolutely. It's incredible.
At that great, I had transformed my dorm room, which is basically a cement box, into an elite bachelor pad.
I had built a box within a box to remodel my dorm room with maple wood paneling and wall-to-wall carpeting.
I built my own furniture.
And on alumni weekend, the occupant of the room the years prior came back to look at his dorm room and looked at what I'd done to the place and said, oh my goodness, what is this about?
And I said, well, it's just what I do.
I'm pretty handy and I'm a contractor and I largely focus on painting.
And he said, well, what's your major?
And I said, well, I'm pre-med.
Certainly qualify for the Olympic trials.
And who knows? Maybe I'll have a good day.
By the way, what's the fastest you've ever ran a marathon in?
So in the US national championships in 1980, I ran 216, 37.
Two hours, 16 minutes, 37 seconds.
Wow. So you qualified for the Olympic trials for the 1980 US team.
Did you make the team? No.
In fact, a couple of things happened.
First of all, the training was, and this is what literally created a new career path for me.
I got so injured from both the amount of training, the amount of miles I was doing, and the diet that was required.
You were like 28, 29 years old at this point, which is sort of like when you're really starting to hit your stride as a marathon runner.
Right, exactly. And, but you know, in those days, it was all about carbohydrate loading and you carb-loaded every single day.
Pots of dinners and yeah.
Anything goes. By the way, the furnace will burn anything.
So it was a lot of beer, a lot of bread, a lot of pasta.
And by the way, you were running, you were probably running 10 to 15 miles or more a day.
I was averaging 100 miles a week for several years.
Yeah. This can't be good for you.
No, no, no, it's not. I am here to tell you it's not good for you.
Right. It is something that humans can do, but it's not good for us.
I want to just zoom in for a quick moment and ask you about the- To run, to be competitive.
So you were, I mean, you were obviously an elite runner, but not, I mean, elite, elite, there's elite, and then there's the people who make the Olympic team.
And of course, 1980, there was a boycott.
You had boycott of the Moscow Olympics, so you would not have gone to the Olympics anyway.
But it sounded like that kind of, you're 28 and you're kind of broken at this point.
Yeah. Physically. Yeah.
Yeah. No, for sure. So in 1980, I was actually 27.
And for a while, I was quite down to myself because one of the things that happens as an endurance athlete is you sort of build up this tolerance to pain and discomfort.
And then you almost require it on a daily basis.
And people talk about the runners high, they talk about the endorphins and the addiction.
And all of that is true, but I don't know.
And they also call it a good addiction.
I'm not sure it's a good addiction.
And by the way, were you living in Maine at this time?
Sorry. By then, I lived in Williamstown through 1978.
I packed up everything and I drove across the country to Palo Alto and Menlo Park in that area of Northern California.
Because you can run your route.
Absolutely. So I had this, I was jonesing for exertion and some form of activity.
So I started riding a bike.
And as I was riding more and more miles, I met a guy, a friend I'd known from across town who said, hey man, I'm training for this thing over in Hawaii.
It's called the Iron Man.
You should join me. And I'm like, you're crazy.
I have no inclination. There's nothing in my constitution that would suggest that that would be fun.
And after a couple of rides with him, he kind of convinced me that this would be at least a worthy pursuit.
So I signed up for the 1981 Iron Man, which was the first year they had it in Kona.
I finished like 21st or something like that.
It wasn't bad at all. I mean, it still wasn't bad.
It was horrible. But it was not a bad first time finish.
By the way, that was my first triathlon ever.
I'd never entered a triathlon prior to that.
And I didn't know how to swim, so I had to teach myself how to swim.
It's interesting because you had, you just talked about how your body was broken because you were running 100 miles a week.
And now you're talking about doing Iron Man.
Like I'm thinking you're about to say, and then I just gave all that up and I stopped doing that, but you jumped into another.
Yeah, even less so. Yeah.
Well, all of this informs the next 40 years of my life because there was a point at which after I finished fourth at the Iron Man in 1982, that's when I just realized, you know what, I think it's out of my system.
I don't need to compete anymore.
And because I had been a business person most of my life, I had painting houses when I was 14, so I needed to make a living.
Because you weren't making money doing it.
And this is before you could make, I mean, now there's sponsorships and things like that, right?
But so you were, I mean, you're 30 around this time when you placed fourth at the 82 Iron Man.
But I guess around that time, I read that you had started like a frozen yogurt shop in Palo Alto.
That's right. So this was February of 82.
So a few months later, a friend of mine, a classmate of mine from Williams, who'd come to Northern California under the Merrill Lynch Stock Brokerage Training Program, had seen how much money I was making as a painting contractor and decided to become a painter.
You were painting houses in Palo Alto?
Yes. And you could just make a ton of cash, just doing basically you maybe hire one or two people and that was it.
That was it. Yeah. After I retired after that 82 Iron Man, I said, you know what, I'm gonna treat this more like a business.
So my friend and I had started because he saw how much money there was to be made in this painting contract and business.
So we started a company called Marathon Painters of all things.
In Palo Alto. In Palo Alto.
South Bay, yeah. Correct.
And we did reasonably well, but we were kind of itching to get into other stuff and we were both entrepreneurial.
And so we saw this in Mer...
Cool licks with a C or with a K?
Yes, with a C. With a C. Okay.
Cool licks. All right. It was a great name.
I was just thinking it with...
so now the obvious next step in the playbook is let's go to the...
let's build another frozen yogurt shop, right?
Right, exactly. Okay. However, my partner had a girlfriend who lived in San Diego and he would go down and visit her every other weekend.
And there was a place emerging in San Diego called Soup Plantation.
Do you remember that? Oh yeah, I do.
I do. Yeah, I went bankrupt a couple years ago.
It was awesome. Get soup, salad, yeah.
So we thought, okay, if frozen yogurt is good, what if we had frozen yogurt, a 60-foot-long salad bar, muffins because brand muffins were the big thing, fresh baked cookies because Mrs.
Fields was just coming on the scene.
You're taking Mrs. Fia.
Keep going. I love it. All in one...
Yeah, yeah, yeah. And put it all into one, under one roof.
And so we secured a location about a mile and a half down the road from Apple computer.
We built this 60-foot-long salad bar that was refrigerated from underneath.
We put in eight frozen yogurt machines.
We put in a soup bar. We hired one of Mrs.
Fields' top managers to oversee the cookie and the muffin operation.
But it was 1983 and 84. And to open the place, we had to borrow money.
And we were thrilled to get a loan rate of 17 and three-quarters percent.
17. People are complaining about six, seven percent home loans today.
They're forgetting 83.
You got a 17 percent interest rate to borrow money for a business.
And that was normal. And nobody...
That was just like... That's what it was.
In fact, it was 18 and a half.
So we were... Wow. When I say we were thrilled to get it down to 17 and three-quarters, which meant that we had to make like $15,000 a month profit out of the gate just to service the debt.
Just to service the debt.
And a bad series of events, if you will.
While we were building out the location, the landlord put a gym next door that offered aerobics classes at noon.
And so all the parking spaces would fill up.
And so when people left Apple computer or any other business to come have lunch, they drive through the lot and all the space would be taken.
So they just go on to the next location.
Oh, wow. So we got kind of nailed by the parking problem.
We got hammered by the loan.
And so after about a year and a half of struggling to make that place work, my partner and I came to an agreement that we would part ways and that he would take over the restaurant.
I was happy to give it to him.
And he would get the frozen yogurt shop, which was still very profitable, and the restaurant and the painting company.
And I was just, I was happy to start over again.
So I guess by this point, you're in your early 30s and you've done a bunch of different things.
But I read that after the failure of the restaurant, I guess you moved to Southern California to LA to kind of reboot your career.
And I think you went into personal training, right?
Yeah. So as I was living in Southern California, I started becoming a personal trainer and I found I could make a lot of money teaching other people or training other people as a personal trainer, how to lift weights, how to train.
A lot of people were trying to train for triathlon in those days.
So my cred there was such that I got a lot of clients.
And eventually that I parlayed that into becoming the coach of a professional triathlon team.
By this time, triathlon was professional.
You could actually make money.
There was prize money. So I coached a professional team.
And at some point in 1988, I got called up by a friend who was on the board of directors of the United States Triathlon Federation.
And I was asked to participate in the creation of a drug testing document for the sport that prevented athletes from taking advantage of performance enhancing drugs.
So I was on this committee.
I was also asked to go to be the one to present the completed rules to the board of directors of the Federation.
And a few weeks later, I was asked, would I be willing to come to Colorado Springs and take over the running of the Federation?
Wow. And I did. And so that was the next chapter in my life.
So your job basically in the late 80s and into the early 90s in Colorado Springs, you went to go work for the triathlon Federation.
This was your, that was your employer?
Correct. But I guess at a certain point, it's around sort of the mid 90s, you decided that you wanted to start a kind of a side business selling supplements.
Tell me about how that came about.
So I was executive director of the US Federation from 89 through the end of 91.
I had asked my girlfriend to move to Colorado Springs with me.
And her response was, okay, I'll do it if we get married.
So we got married in Colorado Springs and we had our first child.
She's still your wife today, I should say.
She's my wife today. Okay.
Yep. And, but after a couple of years there, felt like my work had been done and my wife hated Colorado Springs.
She was a LA girl. So we came back to LA and I took a job as the chief operating officer of a supplement company.
And because of my early investigations into the anti-doping movement and knowing a lot about the difference between steroids and prehormones and prohormones and caffeine and ergogenic aids and blood thinning, you know, I had a pretty deep knowledge of what was appropriate and what was not in terms of at least the rules governing sport.
I wound up working for this company for five years.
That was making supplements.
Making supplements and all over the place from multivitamin, multimineral, antioxidant supplements.
You know, we were some of the first people to make a carbohydrate powder that you would put into a bike water bottle.
By the way, what was the name of the company?
It was called the winning combination, TWC.
It doesn't exist anymore, but my friend, is very good friend of mine who started it and ran it, became one of the top vitamin guys in the world.
But I left after five years, I didn't have any equity in the company and there was none on the horizon.
And so I decided at that point that I knew enough about supplementation, I knew enough about training, I knew enough about performance that I would start my own company.
And so I left in 97 to start Primal Nutrition, a company that initially I looked at making preparation in your capsules.
Exactly. Yeah, right. So, but that only gets you a product.
Now you have to sell it. Yeah, you have to sell it, right?
And I mean, it turns out you actually figured out a kind of a pretty lucrative way to sell it in kind of an unexpected way.
And I started, I guess, you started to become a guest on like a Christian TV show, like a health and fitness show that was on a Christian cable network?
Yes, yes. I met somebody who had a TV show on a cobbled together network of faith and family religious type programming called FamilyNet.
His show was called Know the Cause.
So I went on his show one day and we talked about all the things I know about training for the average person and all of these things that resonated with his audience who were, you know, if you wanted to use the term anti-aging back in those days, they were sort of leaning toward that anti-aging concept.
And I sold like $20,000 worth of product at the end of the show.
And what it was in those days, again, this is 99, it was an 800 number that you had to call.
Operators are waiting, they're standing by for your call, classic, you know, infomercial type pitch.
And by the way, do you have a sense of how big the audience was?
You know, I do. It was probably on any given day, there were probably 40 or 45,000 people watching.
So you saw the success of being on that show once and you were like, I got to figure, I got to go back on this thing.
Exactly. And this guy, the host of the show, his name is Doug Kaufman, he was paying for his time to do the show.
Correct. Okay. And so I became one of probably on any given month, five sponsors, five guests.
Sponsor the whole episode and then you'd be the guest.
Yeah. So I was paying maybe $20,000 or $30,000 a month to start with and it escalated up to $60,000 and $70,000 a month, but it was...
A big team. It was like your painting business, right?
Exactly. I worked, I operated out of my house and we picked and packed out of the garage for a lot of this.
And how many employees did you have at its peak?
I mean, $7 to $9 million in sales, how many people did you need to run the business?
The most I had was seven.
What an efficient business.
Yeah. And it didn't even get up to seven until later on when the...
We had a pivot on the marketing side of things.
So what happened was in the early 2000s, as the internet was becoming a thing, the number of channels on television exploded with cable TV, cable and dish and direct.
This idea that 40,000 or 50,000 eyeballs, people were watching you every day on a show, kind of that receded into the past.
Because there were so many more options that there was this disaggregation, fewer eyeballs on one show essentially.
Point one and point two is I think there was some exhaustion on the number of infomercials on TV.
Look, in the late 80s, all the way through the 90s, infomercials were cool.
Man, oh, look at this. There's just no gadget on the...
Let's look at it. Let's watch for 30 minutes.
Now by then, by the early 2000s, because of all these cable channels, there would be 10 infomercials on at the same time.
You literally had channels that were just infomercials.
Yes. And you started to see your business decline, the revenue decline?
Yes. So the first thing I did was I said, I'm pretty good at this content thing.
I'm going to do my own TV show.
So I spent a year, 2005, writing, producing, starring in along with a guest host.
I shot 50 half hour episodes of a health talk show called Responsible Health.
Wait, hold on. Let me just...
So you decided to make a show, a half hour show.
And the idea was, hey, really, I want to build my brand out as Mark Sisson.
I want to be more known to a broader audience of people and it'll do this TV show.
Was that the idea? Part of it was just, I thought I could recapture this same concept that I'd done with Doug Kaufman for the prior bunch of years.
And so I poured well over a million dollars into this.
I had guests on every time.
So I would have a guest on my show, physicians, anti-aging people, authors of books.
And you would advertise your supplements.
And I was the advertiser.
Right. Now, understand that once you produce these shows, you have to air them.
So I bought time on Travel Channel.
So for several months, I was on at 8.30 in the morning on Travel Channel in 95 million homes.
Wow. So here's where we have to look.
You look at the business model and you go, wow, 95 million homes.
That's a lot. But if you think about what's going on on television at 8.30 in the morning.
This is like 2005, 2006, right?
2005. Okay. First of all, 80% of people are not watching TV.
So that leaves 20% of people that are even able to watch TV.
Of those 20%, 80% are watching ABC, CBS, NBC, Fox.
Okay. By the time you get to Travel Channel, I guarantee you there were not 1,400 people watching.
So a couple of months in, I'm like, I'm losing my ass.
I thought it would work.
Pretty much gone through all of my savings at that time.
And you weren't selling product?
The ads weren't working?
No, the ads weren't working.
It was one of the most stressful years of my life because of the amount of time it took to write, produce, and shoot these shows.
And I had to take a step back and say at some point I got to pull the plug, otherwise I'm taking my family down with me.
When we come back in just a moment, Mark starts to build a new audience around the Paleo diet.
First with a blog, then with a book, and then with a new recipe for Mayo.
Stay with us. I'm Sarah Z and you're listening to How I Built This.
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Hey, welcome back to How I Built This.
I'm Guy Razz. So it's around 2006 and Mark's health and fitness show on cable TV is not panning out.
And at this point, he's used up most of his savings and he needs a new plan.
So what happened was I took a step back and I'm like, I'm good at creating content.
I think I will start a blog and I will write about something every day for a year.
And by the end of the year, I will have written about everything I need to write about and that'll be the end of it.
And you would sell, you would link to your products.
And that would be the platform that I would link to my products.
Yeah. And so were you, I mean, presumably when you started the blog, you had no readers, right?
Zero. Zero. And so were you still advertising on TV to get?
No. No. You were just, you were focused or you were depending on repeat customers for your supplements at this point?
Exactly. Yeah. All right.
So you had the blog. The idea was the blog is going to replace that audience I had on television, right?
I mean, you're going to build that audience there.
So you're writing something every single day and after a year of doing this, how big did it get?
So the first year, I think it was like 1200 a day.
By year two, it was three to 4000 a day.
And were you discouraged?
Yeah. Because I thought from day one, I thought, oh, you know, within a couple of months, I'll have 100,000 readers a day and this will far surpass anything I did on television.
But I started writing about the Paleo diet and I called my own particular version the Primal Blueprint, but I was writing about the Paleo diet as one of the, you know, first guys to do that.
There had been a book written a few years earlier by a guy by Lauren Cordeine called the Paleo diet, but I was really starting to write about the lifestyle and apparently I wrote enough compelling content that people started saying, look, man, you should write a book about this.
This is, you know, like, I love your blog post, but I don't want to have to go back and read every single one.
Can you put it all in a book form?
Well, just tell me about the Paleo diet for a moment.
I know it. I've been on it myself.
And I, but how did you get into like, I need to change my diet and I want to try this.
So after my 2005 experience with producing the TV show and being under incredible benefits in your life.
Absolutely. Yeah. So that led to my creating a life way, a template for living that included dietary implications, but also addressed sleep and sun exposure and movement and play and using your brain.
So I decided to write a book which I called the Primal Blueprint and that came out in 2009 and was an immediate big seller.
Now, when I say immediate big seller, I couldn't find a publisher for it.
So I self-published it.
And by that point, how many subscribers to your blog did you have?
So by then I was up to probably 20,000 regular to 30,000 regular readers a day and maybe a million to two million uniques a month.
Wow. And people finding it by doing Google searches on Paleo or...
Yes. Yes. Okay. So because this was really when it was starting to take off, that whole Paleo.
And I think 2013 I read that thought about nutrition and art, but how did you come up with your theories or your ideas?
Were you doing research or was it just based on your own experience with your own body?
Oh, I did a lot of research, not just the studies, but also sort of the evaluations of the studies over the years.
So I did have a background in biology.
I had a sort of a secondary major in evolutionary biology.
So I'm certain that today we're walking around with a genetic recipe that was crafted over two and a half million years of human evolution that our genes expect us to do certain things.
They expect us to go to sleep when the sun goes down and wake up when the sun comes up.
They expect us to lift heavy things once in a while.
They expect us to move around all day long and not sit on the sofa.
Yes. They do not eat three meals a day, but in fact, just eat sporadically.
And all of these things that we've sort of created a society around is pretty much it.
That's pretty much it. And so what you're talking about are sort of like minor modifications of those basic principles.
Exactly. So the book got out there and I started writing more books.
I became my own self-publisher.
I started publishing a house.
That generated some income.
We did two million a year in sales and in books.
So you were basically becoming this kind of this guy who's known as a paleo guy.
That was branding. But I was still kind of disappointed with the effect that this blog, which had now half a million subscribers to a newsletter and it wasn't selling supplements the way I had anticipated.
Given the size of the audience.
Given the size of the audience.
And so really this realization that for the last six years, I've been writing about food a lot and how so much of our good health depends on natural foods that are consistent with the evolutionary behavior.
And it just occurred to me that I should be selling food because I'm writing so much about it.
And I was telling people eat a great diet and you don't need supplements by that, you know, that much and oh, by the way, here's my supplements.
So if you eliminate on this path before and but you could see the opportunity.
So let me first start, just kind of break this down.
Did you kind of wind down the supplement business or did you keep that going just as a hedge?
Well, kept it going. In fact, it funded the startup, if you will, of the food company.
Because you didn't start a separate company, right?
This was like a subsidiary.
Right. Yeah. Okay. Right.
And that was a, you know, a critical decision I made early on that I while I wanted to start a sauces company addressing a condiment company, I didn't want to start a new company for a couple of reasons, one of which was within my existing business.
I already had a warehouse.
I had fulfillment. I had credit card processing so I could sell directly to the consumer.
So I had all of these, this infrastructure in place.
And also I didn't want to take a dollar out of my supplement company and then pay 37% to the federal government and 13% to the state of California.
Yeah. And then take the remaining 47 cents and start a new company with it.
So it was very beneficial for a primal nutrition selling supplements.
So you basically were able to, with the existing supplements company, kind of create this sort of other product line essentially, which was going to be condiments.
So I have, I mean, initially, I guess you could be self-funded.
You didn't have to find outside funding.
Yeah. And don't get me wrong.
I mean, I was still making two, two and a half million dollars a year on the supplement business.
But I was taking the money that I would have put in my own pocket and just using it to finance this new product line, which I hoped would become its own company.
But I didn't know. I mean, it was early days.
It was an experiment. On the other hand, if I'd started a new company, I probably would have gone out and raised money from outside sources.
I would have, I would have given up more equity than I would have wanted to have given up.
All right, so I want to get back to the period of time before you had a product, right?
Because you had been doing recipes on your blog and you knew how to cook.
Yes. But you also were trying to figure out, because I think you wanted to make a bunch of different products from the get-go.
So who did you bring on to help you do this?
Like, did you find a chef?
Did you find like, how did you even start?
So in 2000, early 2014, I, we're going to take this one mayonnaise and these two salad dressings that are halfway there, and we're going to enter the marketplace.
And we're just going to see what happens.
You said, hey, we're selling mayonnaise on.
Yep. Yep. Okay. But it's, it's new thing, right?
It's mayonnaise. It's good for you.
It's based on avocado oil as the healthiest fat that's out there.
Yep. Tastes great. Because you have to understand in the paleo world, mayonnaise, people love mayonnaise.
I didn't realize this. I know.
I love mayonnaise. I didn't realize this, but you know, when I entered the space, I didn't know anything about food.
And so I always assumed ketchup was the huge market and mayonnaise was second.
Mayonnaise is twice the market that ketchup is.
So the first product that we were able to commercially make was an avocado oil based mayonnaise.
And I said, let's make a mayonnaise that is demonstrably the best in its category using the best possible ingredients, let's build it first and price it later.
In other words, whatever it takes to make it, let's see what those costs come out at, and then let's price it at retail according to a formula that would give us a reasonable margin.
And so I entered the marketplace at 9.95 retail for a 12 ounce Jaramane's.
Like who's going to buy a Jaramane's for that price when you can get it for 2.95 or 3.95 for a regular Jaramane's.
Well that was the bad I was, I would assign them as the only place online that you can get Primal Kitchen mayonnaise.
So in that first year, the two of us sold just an incredible amount of mayonnaise direct to consumer.
So first through the blog and then through Thrive Market.
Well online. Online, okay.
Just online. Because very early days, we approached Whole Foods.
And we went to the buyers at the Rocky Mountain region, which had 33 stores.
Talk to the buyer, and his name is David Woods, a great friend, and tell him the story.
And normally it takes about 18 months for a new product to get into Whole Foods.
But Dave Woods was a big crossfit guy and he was all about paleo, all about Primal.
And so Dave said, this is incredible.
This is what we've been looking for.
We will build you an end cap in every one of our stores.
So very quickly we got into those 33 stores and then next thing you know, we're in an equal number of stores in the Pacific Northwest.
And so now because we're doing so well at all of these Whole Foods, the rest of the Whole Foods buyers, they all got on board.
That was in year one. That was in year one.
How did you find the, you know, the copacker to do this?
Was it a local place in Southern California?
I mean, because it's not that complicated, right?
If you find a place, they can make the man, you manage your recipe and then put it in the jar and seal it up.
Yes. It's not that complicated.
On the other hand, if you're a startup and your co-manufacturer is doing $20 million a year with this company and $50 million a year with that company and you come in and say, I think we can do 100,000 jars this year if we're lucky.
It's tough to get in the door with some of these operations and especially the ones that are going to be able to make your product consistently.
I mean, that's a huge thing.
There are lots of copackers in food that have issues and you want, you know, you're dealing with food.
It's a very sensitive area.
You want to be able to rely on the safety and the procedures and everything that you've put in place.
Yeah. But it's a good thing to point out because we almost went out of business and the reason was we'd had, I think, two or three big runs of mayonnaise that we'd sold out of and we were getting ready to do another one.
It might have been that literally went down the drain.
Okay. Let's try again. And so we, because we are a small player with a large copacker, it's not like you can try again tomorrow.
It's like maybe we can find time on the line in three weeks.
Okay. Let's find time. Let's do it again.
So three weeks comes, we get the news, it broke again.
We couldn't make it again.
And they're blaming you.
They're saying it's your recipe.
It's your recipe. Maybe there's a reason that people didn't make mayonnaise with avocado oil.
It has different fatty acid profile.
It has different, so we're scratching our heads.
We're freaking out because this is the business.
Maybe this is the end of it.
And so we get one more time on the line and we, in investigating where we'd been making the mayonnaise, they said, well, you know, we'd made the first couple of badges on our chilled line and these weren't on our chilled line.
And we realized that the oil has to come through a chiller before it reaches the vat.
And that's what gives it the emulsification properties that this particular oil needs.
Sustive maybe breaking up with her boyfriend, but they were getting back together again.
And Monday morning rolls around and I go to the office in Malibu and Morgan rolls in and she said, you're not going to believe it.
We made mayonnaise and I'm getting married.
So those little moments, that's that sheer terror of being a small business owner and thinking that maybe your business won't survive the night.
When we come back in just a moment, Mark encounters more moments of terror as he floats the business on a personal line of credit and opens himself up to more risk by deciding to launch a restaurant.
Stay with us. I'm Guy Razz and you're listening to How I Built This.
Hey, welcome back to How I Built This.
I'm Guy Razz. So it's the first year of Primal Kitchen and Mark's made it through the great mayonnaise meltdown of 2015.
And he's feeling better about the business, but he doesn't want to hold on to it for too long.
Maybe just three to five years before he exits.
That was the plan, partly because I knew that I was going to be, you know, in my late 60s by the time an exit occurred, if that were the case, partly because my kids didn't want anything to do with the business.
Almost most importantly, I recognize that with particularly startups, you can get to a certain sales volume with a particular team, but then at some point you need assistance.
You either need a different team or you need more investors.
And in our case, I wanted to find a partner in a large food company, what we call a strategic acquirer that could leverage what we'd done.
Yeah. So you launched this thing and you really kind of hit this wave.
I mean, you launched at a time when Paleo was really getting a lot of interest and you could see at that time already, you know, coconut oil and all kinds of products that were designed, grass-fed meat that were designed for that kind of diet.
You could start to see it.
And in your first year, I think you guys, I mean, what were your sales that year?
In 2015, we did a million seven.
And then as we set out to plot a strategy for the next year, for 2016, in this business, because there are long lead times, like 13 week lead times for some of these production runs.
And because we were set out to create a budget for 2016, we thought, well, God, a million seven in the first year, that's pretty good.
Can we do six million in 2016?
And so we... That's a massive grow.
Yeah. We set out to do that and we set that as a budget of doing six million in sales in 2016.
And by June of 2016, we had done six million in sales.
And that was only on mayonnaise or were there other products by...
No. So by then, we had continuously been working on other products because we recognized we wanted to be a family of products.
We wanted to be... Ultimately, there was a point at which we wanted to be in pretty much every aisle that had anything to do with sauces or dressings or toppings.
So by then we had a couple of flavors of mayonnaise.
We had a chipotle lime mayonnaise.
We had a garlic aioli mayonnaise.
We had six flavors of salad dressing.
By then, we were starting to develop our first ketchup.
And barbecue sauce eventually would come.
And barbecue sauces and then pasta sauces, yeah.
And you... As you mentioned earlier in 2016, you more than exceeded your six million dollars in sales.
I think you hit 13 million in sales.
And by this point, I mean, you were in Whole Foods and many Whole Foods.
I think probably by 2016, you were in all of them.
Okay. Yes. You were also selling on Amazon.
Yes. And then you started...
For those occasional times when I dipped in and bet a million dollars on something that didn't turn out...
Like a TV show. Like the TV show.
Yeah, exactly. I was still...
I was still... I still had that New England frugality, if you will, right?
Like, I wasn't gonna go deep into debt without some sort of a backstop.
I mean, still, I have to imagine that was a little nerve-wracking because there's always a possibility that you're gonna go south and then you've got to use your assets to pay back the loan.
More than a little nerve-wracking, yeah.
I mean, there was a time two years in when I think I went to Morgan and I said, I...
This is a little too much for me to bear.
And if somebody came and offered us 30 million for it right now, I'd take it.
I didn't like having that line of credit hanging over me.
You know, and I'm just...
She reminds me this all the time, that there was a time when I would have walked away for...
That was my walk away number, right?
30 million. Yeah. But then, things...
They were always looking positive and we were getting such amazing feedback from customers.
We won awards at food shows at Expo West, for instance.
We got a Consumer's Choice Award for our catch-up the year that launched.
So I knew we were doing the right thing.
It was just, you know, a little nerve-wracking at times.
There's something I'm curious to ask you about because there's this...
I mean, clearly you were looking...
You were constantly looking at interesting ideas, right?
Like you guys at a certain point put out an energy bar and then I guess at a certain point, you started down the path of opening a primal kitchen restaurant and which never really got off the ground, I guess, what's a story around that?
Well, that's an entirely different saga.
A person came to me who was a consultant to the franchising industry who had followed my programs and had lost 50 pounds and thought it would be appropriate to build a number of restaurants that serve nothing but grass-fed beef and organic vegetables.
Sort of like true food kitchens, like the...
Correct. What's the name?
Andrew Wiles. Yeah. We spent a year and a half writing up the franchising agreements.
We went to market and we sold 18 franchises at our first meeting in the first year.
Wow. And we didn't have an operating unit.
Operating unit means you didn't have a restaurant.
We didn't have a restaurant.
You just sold... In December, we had interviewed a number of banking firms and we selected a banker in May, April or May of 2018, I think around October, November, we had three bids and the one that was, I think the overwhelming favorite was Kraft Heinz Corporation.
It's public knowledge, but it was for $200 million.
And then we spent November hammering out the details of the deal.
Wow. The deal almost fell apart three or four times.
But we hammered something out the two days after Thanksgiving and then we closed January 3rd of 2019.
So effectively, we had an offer less than four years after we launched our first product.
And part of that acquisition agreement was, did you want to stay on at Primal Kitchen or did you know that you want to transition out soon after?
Well, I knew that I was going to go on to something else and I was very happy to remain the face of the business and to participate, which I have.
I wound up with a seven-year consulting agreement where I...
Which you're still in? I'm still in.
I attend certain meetings.
I'm on phone calls. So these are designed for walking, not for running?
Yes. Correct. These are walking shoes.
And weightlifting shoes and training shoes.
The end, they've got the five toes, like the five fingers.
They have the individually articulated toe boxes, as we like to say, which has been done before, but it's a five-toed shoe with an attractive upper.
So that's my new cause, if you will.
This is self-funded now, entirely self-funded, this business.
Would you expect anything else?
Hey, thanks so much for listening to the show this week.
Please make sure to click the follow button on your podcast app so you never miss a new episode of the show.
And as always, it's free.
This episode was produced by Casey Herman with music composed by Ronteen Ereblewe.
It was edited by Neva Grant with research help from Malia Agadelo in engineering by Gilly Moon and Maggie Luther.
Our production staff also includes J.C.
Howard, Catherine Seifer, Sam Paulson, Alex Chung, Kerry Thompson, John Isabella, Chris Messini, and Carla Estevez.
I'm Guy Raaz, and you've been listening to How I Built This.
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