For Zak Normandin, leaving the brand he founded, Little Duck Organics, wasn’t an easy decision. “I was at a point where I had diluted myself (equity-wise) out of the company. I looked three years into the future and realized the best decision was to move-on and start something new.”
Normandin founded Little Duck in 2009 with a simple purpose: to provide healthy, shelf-stable foods for babies and toddlers. After stepping aside, Normandin thought he was going to take the summer off to think about his next career move. Instead, his introspective summer plans quickly morphed into lending a hand to several friends and acquaintances who were launching new products.
It was while working on these projects that Normandin realized strategizing and launching new products was the part he loved most about running a company. He had spearheaded the first plantable packaging; and helped create an ice cream container that changes color when the ice cream is soft enough to scoop — these were the kinds of ideas he wanted to bring to companies, particularly now at a critical point in the industry. While the food and beverage space is getting more notice and funding overall, the number of startups that have popped up in the last few years has oversaturated the market, according to Normandin, making the space increasingly competitive for individual companies.
So last year, Normandin, with the help of Ray Jolicoeur, a friend and an experienced entrepreneur, launched REDWOOD, a creative agency with a singular mission: to help build high quality products—and get them to market fast.
Jolicoeur has a deep background in Consumer, primarily beverages. In addition to working on a number of whisky brands, he also has his own brand, GURU, an organic energy drink and the first of its kind in North America when it launched in 1999. Jolicoeur is still an investor in GURU, and splits his time between tech projects, food projects and REDWOOD, where he is a Partner and the resident expert on the beverage market.
Normandin and Jolicoeur were kind enough to sit down with CircleUp and talk with us about what they look for in new products, upcoming innovations in the food and beverage markets, and the mistakes they made that they wish all entrepreneurs could avoid.
Why did you launch REDWOOD?
Jolicoeur: I bumped into Zak shortly after I relocated to Brooklyn, which eventually led to working on a few projects. We saw the potential to create new brands and help existing brands develop and launch in a competitive marketplace. Startup food and beverage is a bit like what the tech world was in the nineties. Everybody’s trying new things and some companies are creating incredible products. Our job is to help them bring these products to the market.
Normandin: We work with brands and entrepreneurs, usually starting in the basic idea phase, hashing out a concept, and we take them through the whole process: supply chain, ingredients, sourcing, manufacturing. Basically, all the areas you don’t usually have enough time to focus on when you’re growing your brand because you’re too focused on your current products and figuring out how to manage brokers, salespeople, and the myriad of things in the process of building a brand. As an entrepreneur it’s a pretty daunting process to learn your way around a new industry.
What makes you unique?
Normandin: There are a lot of agencies out there that are very focused on design—whether that’s digital design or print design or something else. And now there are groups popping up that are doing more of the formulation and food science work. But yes, I think we’re a bit of an anomaly in that we’re doing packaging and formulations and branding work all under one roof. And staying hyper-focused on creativity & innovation around products. I think that’s the differentiator for us.
We’re basically like an outsourced product development division. Typically newer or smaller companies don’t have the resources to bring someone on to just innovate the product development. And because we have the experience and connections, we’re able to do it quicker and cheaper.
What trends are you seeing in the market right now?
Jolicoeur: Right now there is—especially in Brooklyn—an explosion of food and beverage startups. What we notice is that this market is largely created by a new demand. Consumers are still looking for natural, organic, healthy products, but they’re also interested in local products. This interest is then accelerated by the fact that some key clients, such as Whole Foods, are now foraging through local communities in search of local products to meet this demand.
Can you give us some examples of some products you’ve worked on at REDWOOD?
Normandin: We just helped create a non-dairy yogurt that’s made with a blend of nuts. The client came to us with the idea — a formula that they had been making in their kitchen. The product was (and, is) absolutely amazing, but was not scalable at the time. We helped take the founders to a scalable facility, and work through the process of getting the product into a cup, and onto shelves. That process took a month and a half; it would take far longer if you tried to do it without having any relationships in place.
Jolicoeur: We’re also working on a beverage that caters to pregnant women. Eating during pregnancy can be very restrictive — and even when you can eat something, you don’t necessarily want to. So it’s a very specific taste profile and content profile. It’s also interesting to me because it’s a unique challenge. This is a short-term, occasion-based drink. It’s a consumer that’s temporarily in this marketplace, so you have to appeal to to them quickly. Then again, it’s also a loyalty that’s passed on, if it’s good there’s a high potential for brand advocates.
What do you look for in a brand?
Normandin: For me, I’m looking for people who have crazy ideas. I like products that are a bit different, or founders who are open to doing things a bit differently. For instance, two women came to us with this really good granola. The product is really tasty. But at the end of the day, it’s granola. There are a lot of people making granola, and the profit margins are terrible. So we thought, why don’t we change the form factor? So, we did. And, what we came-up with is truly unique and revolutionary in a category which has (largely) remained stagnant for many years now.That’s the kind of stuff I like to work on.
Jolicoeur: That’s what I love. There’s no real formula in this. Brands come to us in all stages. You have to keep an open mind. And at first the idea may sound a little weird, but as you work at understanding the entrepreneur you usually get the sense of what’s behind the idea. And that’s where you can really work effectively to bring the vision to reality.
It’s the crazier ideas that tend to shift the landscape. We’ve seen this in so many categories, coconut water is a big one in the beverage sector. When coconut water came out, it was more of an oddity. But when people started to see it as an alternative to traditional sports drinks, it changed the landscape. Crazy ideas can put existing products in a whole new light.
What kind of conventions are you looking to buck?
Normandin: Direct to consumer is such a massive opportunity. We’re launching a beverage right now underneath our own brand. It’s a ready-to-drink beverage launching exclusively on Instagram, which is unheard of for the space. There is a huge opportunity for brands to work direct to consumer and market through social media channels.
For instance, the Kardashians, when they post a product on Instagram it costs upwards of $20k, for one picture. That’s a lot. But, for example, Kim has a conversion rate of up to 1%, and that’s with roughly 30 million followers. You can build a business on that. We’ll create demand through the influencers, and own the distribution so that our customers can purchase directly through us. If you you can cut out the middle-man—your margins increase exponentially.
And that’s the way I want to be different. I want people to realize, they can launch a product and not have to give away 60% of potential profit to retailers.
What are some of the most common mistakes you see consumer brands make?
Jolicoeur: I’m a very strong proponent for a strong positioning statement that clearly identifies the target market, as well as the benefits of the product being created. What I’ve noticed is that when you work with larger companies they understand very well how to develop and launch a new product even when the innovation might not be as strong as when it’s being created by a more entrepreneurial group. But those more entrepreneurial groups trying to launch a new product don’t always have a well-structured plan and they tend to lack a certain focus. And this structure and focus is something you absolutely need in order to communicate well and to have a product that is very clear in either its function or its positioning, and ideally both.
Normandin: At this point in time, I think the biggest thing is that brands aren’t innovating fast enough. There is a glut of new products and new brands on the market, which ups the game for the established brands. They need to innovate or they will be out-innovated by new products and brands. The smarter brands understand this.
What else would you say the most successful companies in this space understand?
Normandin: You need to have the right people involved with your company. It’s not just about having famous names attached to it, or having a stockpile of money to spend on it. Take Unreal, for example: it’s a candy company that launched a few years back. They spent roughly $30 million to launch the brand and were in tens of thousands of accounts overnight. They had connections everywhere, with so many influencers involved: Tom Brady, Gisele, and a bunch of others. And the brand failed on it’s first launch.
There were a number of issues. A packaging issue, they had oversaturated the market with something that people really didn’t need or care that much about. It was just very interesting to see that situation where you’d think with everything in their favor — the right celebrity influencers, the right amount of money, the right number of retail accounts — they could just put the product out there and it would sell, but that’s not the case. There is no magic formula.
What advice would you give a brand new company, trying to get that first bit of momentum and success?
Normandin: If you want to see something succeed you have to want it more than anything, and to the detriment of everything else around you. You have to be hyper-focused on seeing it grow and be successful. It’s so easy to give up. I have so many bad days, when I find myself emotionally drained. Starting companies is like a roller coaster. Some days things are going great, some days you don’t have any money in your bank account.
Jolicoeur: What I find that seems to be a common thread among people who get to launch their products and get that first level of success, for most of them they’ve reached out and they’ve reached out to people with experience. When I launched GURU I was on the phone day and night, speaking with hundreds of people in the industry, finding out about production processes, about formulation, about reaching new clients, about ingredients.
So my advice is this: Stay curious. If you stay curious, keep asking questions, and keep an open mind, that’s what ultimately leads to success. If you have the ability to marry that work ethic and constant curiosity with your vision, you’re set up for success. Tailor your vision to the reality that is out there, so you can eventually be the one to change the reality.