178. Product Development for CPG Brands

Developing a food or beverage product is deceptively hard. Anyone can whip up a batch of say, BBQ sauce or cookies in their home kitchen, but commercializing them takes a lot of time, nuance, and consideration. I’m joined today by Jamie Valenti-Jordan, founder of Catapult Consulting to discuss the new product development process for CPG brands. 

Startup to Scale is a podcast by Foodbevy, an online community to connect emerging food, beverage, and CPG founders to great resources and partners to grow their business. Visit us at Foodbevy.com to learn about becoming a member or an industry partner today.

Transcript

Product Development for CPG Brands

Jordan Buckner: [00:00:00] Developing a food or beverage product is deceptively hard. Anyone can whip up a batch of, say, barbecue sauce or cookies in their home kitchen, but commercializing them takes a lot of time, nuance, and consideration. I'm joined today by Jamie Valenti Jordan, who is the founder of Catapult Consulting, to discuss new product development process for CPG brands, some of the challenges that you might encounter and opportunities.

Jamie, welcome. 

Jamie Valenti-Jordan: Thank you so much. I appreciate it, Jordan. 

Jordan Buckner: So you work with a ton of emerging and growing brands to help them bring products to market. You know, first off, I'd love to understand from your viewpoint, like what's the difference between making your own recipe at home and professional product development for, you know, CPG product that might live on shelf?

Jamie Valenti-Jordan: Sure, absolutely. 

So when you're making stuff at home your goal is really to engage those that you know in your sphere of influence. To fall in love with your products. And that's great. And it's amazing to see what [00:01:00] people are able to put together and those kinds of user experiences that they can generate as you look to scale that up.

You actually have to engage more than just a formulation. And I think everybody knows this. Your product doesn't mean anything without the processing as well, right? So there's formulation, there's processing to kind of pull those characteristics out of your ingredients and express them in a more nuanced or, or fully fleshed out way.

For example, like you know, throwing some hot peppers into your hot sauce. It's great and all, but until you kind of cook it down, it doesn't create a full flavor profile. But then there's one other piece that cooking at home doesn't really allow you to go after, and that's the packaging element.

The packaging then preserves that user experience that you've gone through the whole process of formulating for, and then expressing those characteristics together. But then you need to preserve it to the point of consumers engaging with it. That means after it's gone through the whole supply chain, they've taken it off the shelf, they put it in their pantry, they take it out of their pantry [00:02:00] and they decide to actually put it on a product you know, you consume it in general.

so really it's the compilation of all three of those elements that is truly product development because from a professional sense, because. Putting something into a formulation is only one piece of generating that unique consumer experience that you're really trying to draw on in putting your brand on the shelf.

Right? So that's how the professionals kind of view it a little bit differently, but at the same time at the heart of it, it's still food in our mouths. It's still engaging that you know, that ancestral brain of engaging with food. Right. And really drawing forth that, cultural expression of love or satisfaction or whatever you know, attribute you assigned to it.

That's really how we kind of go at that and try to make that happen. 

Jordan Buckner: Yeah. I love that. I mean, most of the time with someone developing their own recipe, they're typically trying to optimize for taste, flavor, maybe ingredients that are going into the product. But what's lost when you are [00:03:00] transferring that to a packaged product that's on shelf is stability, consistency, and flavor over time, right?

So you want your product to taste good. You know, a pot as good as it does on day 15 as it does on day 60, right? If it's sitting on the shelf. 

Jamie Valenti-Jordan: Exactly. And one of the things that a lot of people face as they try to scale up is, okay, I can make one pot of this by putting one tomato, one onion, one bell pepper into a pot.

As you scale up, you don't have the same surface area. You don't have the same heat flux. You don't have the same kind of processing conditions. So you don't necessarily get the same expression from a scaled up version of, you know, one tomato, one onion, one bell pepper. You know, I'm not going to discount the culinary aspect of this at all.

It is absolutely challenging to make something that is a tasty food from whole ingredients. It is another thing entirely. To scale it up to large production and then preserve it to the point of consumption. So yeah it's definitely a long, arduous path. I have a [00:04:00] lot of respect for people who go down this path.

I just know that very challenging to get to the end goal on your own. You can't be an expert in everything. 

Jordan Buckner: With my brand TeaSquares, I know we, over six years, you probably tweaked the recipe 60, 70 times, right? To like try to get that right consistency, especially as we. Scale up our, our manufacturing process as well.

And I did not work with a product developer. And that also caused lots of guessing as we moved to different equipment, moved to different companies. And what we could make at a small scale was actually not replicatable at a larger manufacturer without very expensive equipment. So it's something that I always go back and forth on advising brands between.

you know, starting by making what you consider the perfect product from taste perspective, like in your home kitchen versus working with either a manufacturer or product developer from close to the beginning so that you're actually kind of working in process to how it's going to be made at scale and kind of tweaking it then.

Do you have any thoughts in terms of like, try to get that [00:05:00] perfect product first before going to a developer or manufacturer or doing the bulk of the manufacture or the development work kind of with a professional or manufacturer? 

Jamie Valenti-Jordan: Well, I'd say that the advice is different for different people. If you're very, very creative, I'm not going to put, I'm not going to put any shackles on you at all.

I'd say go nuts make the perfect product that doesn't scale and then approach a professional with hey, I've got this product, I need to figure out how to scale it. Just know that they're going to have to recreate it all over again, right? Because you know, it's rebuilding the product from a scalability perspective.

On the other hand, if you're someone who, let's say, you're not a professional chef or something like that then maybe what you want to do is talk with somebody who knows what the scaled up versions of most things are, figure out what those constraints are, because that'll actually make your development a lot easier.

If we say, hey, don't put it in a blender because we can't generate that much force in a scaled up environment. Okay, well, then what do you propose that I do? Well, [00:06:00] you know, honestly, just cutting it up into small pieces with a knife is probably good enough for building that gold standard. Because that I can do all day long, right?

Or better yet, let's source some puree for you, right? And just start with that, and you don't have to put it in a blender, right? So there's a lot of ways in which scaled up versions get to cheat because we get to skip some of the more labor intensive preparatory elements, where that would actually make your development cycle a whole lot easier.

But like I said, if you're a trained chef and , you've got that creative element. Go do that first, right? it's two different solutions for two different people. There's no one path to success in the food market because we're all different people. 

Jordan Buckner: I think that's really key.

You know, one thing that you said is understanding and start with the process that you're probably made first before developing it. And that was one of the core development mistakes that I made with T squares because we were making essentially an energy bar and a bite size and the ingredients and the binders that we used.

We're actually ones that we had to develop like a [00:07:00] mold for first. It was out of like acrylic, which, you know, as a part of testing, and then we got like stainless steel molds made. And when I was thinking, I was like, Oh, there has to be manufacturers that make this at scale and we found out, right.

There's three main ways of making energy bars. There's a slab method where you put on a roller and it's flattened sit on the down and cuts it up. And like strew that method. And then there is a. Rotary molding method was actually kind of shaping them. And it turns out the rotary molders tend to be the most expensive ones, because I think we got quoted, you know, like 300, 000 for custom equipment that we were manufacturing ourselves to get the right shape and everything.

And knowing that from the beginning, we probably would have chose a different manufacturing method and one that could scale. Because it also led to two failed contract manufacturing trials that cost us about 15, 000 to 20, 000 all of a sudden. And it's back and forth between kind of making our sales.

So one thing I always advise people is like start with what the commercial [00:08:00] process looks like now. And if you want to consciously deviate from it, do so knowing kind of at your own risk that there'll have to be special equipment or special consideration could have made to do that. 

Jamie Valenti-Jordan: Yeah, and I think that's where professionals can really add the most value is they can give you based off of where you're at today and what you're thinking.

A viewpoint into the future, because the professionals, they're literally experts in going through the process that you're going through, even if you can't necessarily afford them, at least just run ideas by them. And they're generally going to give you their feedback. The food industry is very, very friendly because we're so small.

We all know each other. So none of us are really out there to screw you when you're a small brand. Our goal really is to focus our time and efforts because there are so many great ideas. On the ones that we can see a path to success, and I think that's been a flaw in the industry in general, that we haven't engaged at a level where, you know, we're teaching as we go.

So we're missing out on [00:09:00] certain ideas and things like that. So I think that's really the goal in all of this is to have everyone understand. I mean, at the end of the day, consultants. On some level, our teachers, yes, we could do it for you all day long, but if you don't learn it so that you can do it the next time through, then we've just really made you a captive audience.

And that's a cheesy way to do things. That's exactly why you know, you started Foodbevy was to start to educate and share those life experiences with each other to be able to you know, make it easier for folks coming behind us. 

Jordan Buckner: I love that. And I love that mindset. To make it easier for a brand going to work with a product developer, what should they have or bring to the table before they even approach a developer in terms of like, how to develop the idea for the product, any guidelines, specifications?

Jamie Valenti-Jordan: That's going to depend on the developer and their experience, but in general, you've got to have at least a drawing of what you want your packaging to look like. A couple of ideas of flavors would be great. Most of the [00:10:00] things that come from, if you're going to work with a solo developer, they're going to want you to cover off on all the marketing elements.

So what are the attributes? Is this going to be you know, clean label? Is this going to be organic? Is this going to be gluten free? What kind of volumes are you expecting? What type of costing do you want out of your ingredients? You may not know these things. But just be clear about, hey, I've thought about it and I thought that I don't know the answer to this. As long as you can define for a developer what's written on what's a classical product brief, then you really are giving them the guide rails to help them be able to develop exactly what it is that you're looking for. It doesn't hurt to be able to hand them a gold standard. If you don't have a gold standard, for example, stuff that you bought from the farmer's market made up into the product and say, Hey, I know this isn't what I'm looking for, like in the long term, but I know that this is what I want it to look like at the end, that's incredibly helpful for a developer because they will start breaking that down, match up things, coach you into certain things to make it easier, or, you know, hey, this doesn't [00:11:00] exist at scale, things like that, so we can get into all of that very quickly and you can leverage what Really, the developer brings to the table, which is their background and expertise in what scaled food products look like 

Jordan Buckner: a lot of our audience.

I know are interested in organic, clean label some into like newer, well, functional ingredients like the Rishi mushrooms of the world. What should a founder look for in a product developer to find someone that understands that kind of mindset, right? Is it easier to find? I know there's some developers who grew up in the big food cults of the world, right?

And are used to adding stabilizers and all these other things into a product flavoring to make them work. Is there something that they should be asking developers who, if they're looking for cleaner label ingredients, minimal stabilizers and minimal additives? 

Jamie Valenti-Jordan: Well, I mean, I think as you define that in the brief to a developer, it becomes a whole lot easier for them to say, Hey, I can do this.

Or they try to coach you in a different direction. Right? So it's not [00:12:00] really an RFP because RFPs don't really work in the food industry as much as. lot of people tell you that they do. That would be like a request for a proposal. Yeah, right. But the brief is probably about as close as you're going to get.

Now, what goes on a brief, honestly, you can stick that , into any AI chatbot and it'll probably give you something pretty decent. So I won't say, hey, you have to email me , for my brief or whatever. I will give it to you, but you don't need it. But I would say You know, at the end of the day putting your requirements in front of a developer and seeing how they respond if they have worked for several years floating across a bunch of different categories, they're going to be more adept at.

different ways of pulling in different things to get stuff done. Even if they, let's say, haven't worked on mayonnaise before. Mayonnaise is a interesting beast, but it's no different than a salad dressing. Anybody who wants to fight me on that, send me an email. I've worked on both. But at the end of the day you know, you've got the experienced professionals out there that Have worked in a lot of categories.

They're going to be able to pull in solutions from different product sets. You've also got the younger developers out there which are amazing very [00:13:00] creative but they haven't done been down the path as much doesn't mean that they don't know what they're doing. I would say when you're working with somebody with less years of experience, make sure that they've got focused experience in your product category.

If they've never worked on frozen foods before, only in sauces and condiments. And they've 

only got, you know, three or four years experience. They may not be a good fit for your frozen food. It's no dig on them. They'll learn it, I promise. But it's just maybe not the right move for a quick go to market, cost effective strategy.

Jordan Buckner: Do you have a sense of, I know it definitely varies, but reasonable ranges to pay for a product developer to kind of good work? You know, I've seen quotes up to like, you know, 50, 000 per new product. But I know for a lot of Brands starting out, they're like, Oh, I need help, but I can't afford that way.

Or, you know, that much do you have a sense of like generally how much and like what it takes to bring a product , to life and then ways that you've advised founders , to get creative at the beginning if they're on a limited budget.

Jamie Valenti-Jordan: And nobody's going to like my answer, I'm not going to give you an hourly rate [00:14:00] because that's a self sabotaging on some level, but. I also don't want to undervalue the contribution of the team that I work with, as well as the teams that are out there doing things at different rates competitors and whatnot. So I would say this different products have different levels of complexity. If you have, let's say, a granola bar, it is going to be substantially easier than a completely novel, let's say, plant based hard boiled egg.

Very, very different scopes of work. As such, you would expect them to cost a substantially different amount of money. What I would say is, anybody looking to bring something to market, you don't need to have all this in the bank when you get started, but I would plan on to get to the point where you are Making more money than you're spending every month?

You're looking at probably a half million dollars for a bottom dollar. And that's if you're really scrappy. Most people, they go for two, two and a half million. So if you're really trying to kind of piece things together and do as much as you can on your own you don't need to worry about money from a paying yourself perspective and things like that.

Yeah, you're going to [00:15:00] run a loss for a while as you try to, you know, get into cost of sales and things like that. All the way through to getting to your bottom dollar. Before you start making enough money to not only pay back everything that you are currently spending every month, but also at some point pay yourself. That's if you want to go you know, pull in on a particular product concept. Now, taking a step back, a lot of people don't have that access. And so they start out as a hobby where they're spending more money than they're making every month, which is fine. That can be a purpose that can serve a purpose specifically around being able to pivot your product concept or certain attributes so you can modify a lot easier production run to production run and things like that.

But you know, there's tricks you can pull about a running in a commercial kitchen for as long as you can. At some point, you will know when you can no longer do that. It's usually when you are busy ordering and producing and then delivering and you have no time to actually execute sales.

And then you need to talk about expanding a team or looking at a command. There's a lot of decision points in there or building out your own facility, which honestly, if you haven't worked in [00:16:00] operations or running in a commercial kitchen, doesn't feel great. Don't own your own facility to start. Because you'll have to rebuild it over and over and over again as you scale.

So it's more recommended to go to a co man, focus on what you do best. If it's operations, great build a facility, run as a co man until you have enough production capacity to kick everybody else out of your facility and you expand it. If it's more around the sales, the branding elements, the You know, being the brand ambassador, if all of those things, lifestyle brands, all that don't own a facility he will just be frustrated by it.

Jordan Buckner: I did that as well. We had our own facility for TeaSquare smaller scale. Well, we had four, five employees kind of at a time manufacturing and, you know, so much of your physical, emotional, mental image goes into that, and definitely felt it. 

Jamie Valenti-Jordan: Yeah. CEO or head of a company you need to have visibility The end of the day, right?

You need to have visibility 6, 7, 12, 15 months out, right? Even at an early, early stage. And if you are locked into a facility running [00:17:00] production, you are not looking that far out. And so you are sabotaging your own business on some level. 

So, Jamie, tell me about the Slingshot program , that you developed.

Jordan Buckner: Because I know you ran into a lot of founders with this problem. Saying like, hey, I know I need help, but I can't hire someone full time to do everything for me. 

Jamie Valenti-Jordan: Yep. You notice I didn't try to plug it mid sentence, mid conversation. Slingshot is a program I named it as such because I run Catapult. A small catapult would be a slingshot.

It's really clever. I'm an engineer. Don't make fun of me. I like it. But the concept is that most people, when they're getting started, lack access to the technical knowledge that they need. They have plenty of time, but not enough money. So I call this my more time than money plan. And so what we do with Slingshot is we put together a cadre of professionals able to address any and all concerns.

And by that, I mean you meet with somebody you chat with them, let's say about product development and sourcing ingredients and things like that. They say, okay. Great. Go back do the [00:18:00] benchtop research. Tell me what you find out about this particular product. This particular ingredient doesn't match your goal and things like that.

By the way, here's, I'm going to go into my Rolodex. I want to pull out the contact names of the different ingredient suppliers that I know that can get you the ingredients that you need. Just tell them I sent you. And you go and call them and then come back two weeks later and say, Hey, this is what I found out after I got those ingredients and this is what it looks like.

And this is what I need to do next. Great. You know, I think you're on the right path. Here's a few more suggestions. Sounds like you're ready for packaging. Let me go call the packaging guy in. And so then you sit down with the packaging person in a couple of weeks and talk about it. Okay, what's the right set for everything?

And you know, how do you preserve and, and how do we make sure that you know, the right structure is chosen? What's the difference between PET, PP, and you know, element of P so you know, it's, it's those type of things. So it gives you access to those technical resources that you need on a dedicated basis.

They'll answer emails. But the idea is to sit down not just for a [00:19:00] half hour that's useless because, you know, we're all just chatting for the first half hour is really digging in for an hour, sitting down, building spreadsheets together, building models or systems of understanding, cracking a book if we need to kind of instruct on the difference between between water activity and water content.

You know, those are the types of things that will actually empower a developer to make, or you know, a founder to make decisions on the fly. Not just now, but six months from now, two years from now, right? They can always refer back to, I know the difference between water activity and water content.

They're talking to me about water content. I don't care about that. What's my water activity? I'm safe. It's not a mold issue. Let's move on, right? So those are the types of things that We really wanted to make available to folks. So we do that for. Very low monthly cost. We do do it as a monthly cost.

It's not the way I prefer to do it, but it's what we need to do to make the numbers work. So for right now you know, it's, it's a thousand dollars a month. And we sit down for folks who want to actually kind of walk [00:20:00] through everything, we'll help build cashflow plans, you know, go to market strategies, pitch decks, whatever the need is we can help across the spectrum to You know, build that value before that brand owner necessarily needs to you know, 50 K for somebody to develop something for them, right?

Sure. It'll take longer. I guarantee it'll take longer to do it yourself, but the opportunity is there to save money. That's what we want to, we need to make available for folks in the industry. 

Jordan Buckner: I love that Jamie, I particularly love that you generally like want to see founders successful. You want to see good products out into the market and they're doing everything that you can to help.

And. Encourage and make it easier for founders to do that. So, yeah, I really appreciate you joining today, talking about product development and also the Slingshot program. If anyone has questions or is interested in that, shoot me a note. We'll put the info in the show notes. Anyone wants an introduction to Jamie, I'm happy to send that over as well.

You can reach out through their website. There'll be in the show notes or shoot me an email and get your product into market. Jamie, thanks so much [00:21:00] for being on. 

Jamie Valenti-Jordan: Thank you, Jordan.