Investing in Regenerative Agriculture and Food
Investing in Regenerative Agriculture and Food
313 Jay Albany - Despite the graveyard of D2C companies, it can work in the world’s most remote city
A conversation with Jay Albany, CEO of Dirty Clean Food, about what it takes to build a successful direct-to-consumer business- basically buying from regen farmers and delivering to consumer, restaurants, etc.- in the regen space and in the most remote city on the planet. Despite all challenges of B2C, Jay makes a passionate case for the contrary. A deep dive full of golden nuggets of direct-to-consumer companies, what works and what doesn't, but also a long conversation on the power of transparency within businesses and the most important return of all, inspiration.
What are the lessons learned? Looking at the graveyard of direct-to-consumer companies we have seen, especially in COVID years, raising a lot of money, struggling, or shutting down. Does that mean disrupting the current supermarket oligopolies isn’t worth it?
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Buckle up, because this is a long one, and for really good reasons. What does it take to build a successful direct-to-consumer business in the region space, basically buying from region farmers and delivering to consumers, restaurants etc. Profitably or almost profitably, in the most remote city on the planet? What are lessons learned? Looking at the graveyard of direct-to-consumer companies we have seen, especially in COVID years raising a lot of money, struggling or shutting down. Does it mean disrupting the current in most places in the global north at least, supermarket strength stronghold. Does it mean that that's not worth it trying to disrupt that? Our guest of today makes a passionate case for the contrary. Join us on a deep dive full of golden nuggets of direct-to-consumer companies, what works and what doesn't, but also a long conversation on the power of transparency within businesses and the most important return of all inspiration.
Speaker 1:This is the Investing in Regenerative Agriculture and Food podcast Investing as if the planet mattered, where we talk to the pioneers in the regenerative food and agriculture space to learn more on how to put our money to work to regenerate soil, people, local communities and ecosystems, while making an appropriate and fair return. Why my focus on soil and regeneration? Because so many of the pressing issues we face today have their roots in how we treat our land and our sea, grow our food, what we eat, wear and consume, and it's time that we, as investors big and small and consumers, start paying much more attention to the dirt slash soil underneath our feet. To make it easy for fans to support our work, we launched our membership community and so many of you have joined us as a member. Thank you. If our work created value for you and if you have the means and only if you have the means consider joining us. Find out more on gumroadcom slash investing in RegenEgg that is, gumroadcom slash investing in RegenEgg or find the link below Welcome to another episode Today with the.
Speaker 2:CEO of Dirty Clean Food. Welcome, Jay. Hello Cone, Thanks for having me.
Speaker 1:And full disclosure. First of all, we are a small investor with Generation V, with our syndicate in your management, biote, which we will cover in this interview. So I'm definitely biased and I have skin in the game and I'm very happy to have that. And but it's also. I wanted to ask you here in general to really explore direct to consumer the pitfalls, the graveyard, the potential, the opportunities and why it seems to be working in Western Australia, probably one of the most remote places we've ever covered we had actually a farmer on recently I'm going to put the link in the show notes which was even more remote, also in Western Australia, but Perth is definitely not so easily reachable but still a very vibrant place and a lot of opportunities and actually a beating heart, I think, of region development in the area. But to start with, a personal question we always like to ask and we like to kick off our conversation with is how did you roll into or end up spending most of your awake hours looking and thinking, tasting, of course, and talking about soil?
Speaker 2:That's a great question, um, to start off with um. You know, for me it's, it's a, it's a long journey here and and I literally everyone we interview says that.
Speaker 1:And then which is because no, no, because we have, we have space.
Speaker 2:It's a terrible question and I just came to me right away. No, no, that's not that question, but like it's a long journey, it wasn't a clear road and and that's to me right away.
Speaker 1:No, not that question. But it's a long journey. It wasn't a clear road and that's the whole point of asking this question, because I want to know why do people? I mean, there are easier career paths in your life. There are easier things than starting to disrupt the food and agriculture system and focusing on regeneration. So I'm curious why and how that happened, and we have space to discuss.
Speaker 2:Could take half an hour, could take an hour, an hour and a half. Who cares? So take it away that that is a dangerous thing to say to me.
Speaker 2:Cone, um, I am known to ramble, but uh, and so I'll tell you a story. I'm known to interrupt, so it's fine. Um, you know, this is not. You know, you know. I'm sure most of the answers you get are about everything starts with soil and it's and it's key to the microbiome. My journey to soil is literally about red dirt and clay.
Speaker 2:I grew up in the southeast of Alabama in the United States, outside of Birmingham. Birmingham was a steel city in the Industrial Revolution and there was a lot of red clay in my yard and I used to play in it and I loved it. I loved the red clay. So you know, we also had a yard with grass and soil, but there was a lot of red dirt.
Speaker 2:And somehow, when I was fast forward from when I'm three and getting red clay all over myself and four as a 30 something year old, I took a vacation holiday to Western Australia with my wife, miranda and we absolutely fell in love with the wide open spaces here in this state. Western Australia is huge. It has all kinds of different habitats but beautiful beaches that have been untouched, but what we really liked was the red dirt and our favorite thing to do was drive to visit a place where it felt like no one had been, and you'd go down these, go down these roads, uh, that you know there's no pavement, or they call it bitumen here. It's just you're on arriving on red dirt and there's red dirt everywhere and it's really, um, a beautiful ochre kind of color that contrasts with the blue sky, and I, I am convinced that me playing and uh playing in that same kind of dirt on the other side of the world, um, probably with the same uh effects, uh, from iron ore is pretty big here as well. Um, I'm convinced that there was something in my gut or or inner person that made me fall in love with this place from that, um, so it is. It is not the same. It's probably not the answer that most people give about soil, and I didn't say anything about, uh, you know, retaining water.
Speaker 2:But, uh, in terms of how I got into this business, um, I believe strongly that my attraction to the red dirt, uh, in this in rural australia, was was, you know what happened, what made it happen? What made us move here? Um, so that's, that's the truth. And once I got here, um, my background, uh, career wise, the thing I had I was just recently doing was uh, uh, eco-friendly online grocery in New York. Um, I really enjoyed it.
Speaker 2:I've I've I've had a couple of uh startups before dirty clean food where I was really focused on convenient delivery and how to make that something that everyone can feel good about, how it's done, and so when I was here showing up, I really wanted to stick in that industry and I met some folks who Ben Cole at Wide Open Agriculture, who taught me a lot about what they were doing in the regenerative agriculture space, and then I really started to learn about some of the more scientific reasons that investing our time and energy into rebuilding soil is a really good long-term plan. It's a lot better than what we've been doing.
Speaker 1:And so that wasn't necessarily part of your work and your companies in New York. You mentioned eco-friendly delivery. Was there any focus on soil or was that not part of, let's say, your vocabulary until you got to Western Australia and met, met, met, wide open ag?
Speaker 2:uh no, I mean really not. Um, we, you know. So, first of all, you need to, you need to rewind back when everyone had plastic bags and drove diesel trucks all over cities and stuff.
Speaker 2:Uh so, which, which is still do, yeah, but yeah but you know, for for us, eco-friendly meant, you know the competitors had an organic section. So what can we do? That was better than that. So for us it was. You know we were the first people in New York to have an electric bike fleet. We were doing bicycle delivery, you know, not like Uber, but you know, as the grocery delivery these big, long bicycles, whereas our competitors in the space were, you know, these big diesel trucks that would sit in a crowded city block and they'd do what they had to do.
Speaker 2:And then we also, you know we had a reusable bag program. You know, tried to make it as easy as possible for people not to use plastic bags. You know these are. You know, in Australia I don't even think you're allowed to use a plastic bag these days, but back then, you know that was a. That was a big, a big change. And you know our, our plan was basically, you know our sort of conversation to the customer was how many times we've been to the moon and back on our bicycles, as a way to sort of show how much they're avoiding. You know, how much they're helping the climate.
Speaker 2:And in terms of the bags it was. You know we lost so much money on these reusable bags because they were still relatively expensive and we would. You know someone would order and you know a grocery order can be six or seven bags. If it's like to an office it could be 20. And you know you charge them. A deposit on the bag was our system for that. But it was really difficult to keep track of them. So if someone called up and complained, you know we were not going to hold them. We did have a system. We actually scanned all the bags and in and out linked with the customer. But still I'd open the door some days I'd look in the room where we kept our backup, you know reused bags, and it'd just be. I think I cannot charge someone. You know the 40 for the bags we think they have when I look in this room.
Speaker 1:Yeah, it sounds nice on paper. And then actually figuring out that system of reusing is yeah, it's, it's, yeah, it's super, super tricky. And then when you met Wide Open Ag, which works for coming out of common land, or coming out of common land is, it's one of the common land companies, let's say, we just interviewed willem, which will probably be out either just before or just after this. We've interviewed many people of common land actually in the past, which I will link below uh, take line guys with grounded in south africa and southern africa. Uh, jasper, on the financial returns on landscape scale regeneration. Uh, michiel de man, I think was one of the first interviews we ever did number three or four, if I remember correctly in the in this series. Um, what point was wide open ag when you, when you met them and was dirty, clean food, was the brand already? Um, already part of that or not?
Speaker 2:yet yeah, no, um. So I met. I arrived, uh, in australia, sort of for good. I hope my mother and brother don't take extra meaning from me saying for good, but, like you know, I've been here since.
Speaker 1:We can edit and.
Speaker 2:I'm a citizen. I arrived in Western Australia kind of late 2018, I think November. I met Ben, so at that time, I was working on an online grocery idea. When you move across the world, you don't necessarily have a huge network to draw on. So I was going to this place called Space Cube, which was a little hub of all these, you know, startup, entrepreneur, entrepreneurial types, and I was kind of the guy with the gray beard who was sitting there working on my idea and, um, maybe a little, maybe looking a little weird, but, um, I had a pretty clear vision. That was I was calling best of Margaret river and it was, um, basically assembling some really great, uh, gourmet and and ethical food companies and brands from the South where they all go on on holiday, and then enabling fast delivery of that uh in Perth. So you know. So, um, I thought that was going to be a good idea and I was shopping that around some of the groceries uh in town see if anyone wanted to invest in me or team up and, uh, someone introduced me to Ben.
Speaker 2:Uh, so I drove down to Williams uh, western Australia, and Williams is is really uh, in a remote place. Uh, we were talking about remote earlier. This is. You know, I don't want to guess their population size cause it might make someone angry, but it is definitely small, um, and there's definitely red dirt and scrub bush there and uh, uh, it was so hot because the seasons are reversed in australia versus, uh, probably what your listeners are used to. So you know, christmas in australia is very, very hot, especially in, uh, rural western australia, um, or country western australia. So I had I didn't really know what to expect, so I was kind of dressed up with a little suit it's a listed company so I wanted to look my best and I had to pull over like 20 minutes before I got into town and change shirts. I was so hot and sweaty after driving down there, but I met Ben and I really hit it off.
Speaker 1:Which wasn't dressed up, I think, imagining the temperature.
Speaker 2:That was a mistake. I shouldn't have dressed up, I think, imagining the temperature, that was a mistake. I shouldn't have dressed up. Ben was probably in. I don't remember what he was wearing, but it wouldn't surprise me if it was a T-shirt and thongs, flip-flops. But anyways, I met Ben and we really hit it off and at that stage, wide had had basically just winded down the, this really exciting and ambitious project, uh, which was called a shade house, where they were growing, uh, vegetables tomatoes in in a really remote uh area and with a regenerative theme, a really really cool project that worked from a impact perspective but was challenging commercially.
Speaker 2:So from my perspective, I was a little naive, I guess Well, I don't know if naive is the right word but a little green and new to the regen space and my kind of full experience of regen uh, or what I think would now be defined as region uh, was my brooklyn farmer's market. Uh, where I'd go with my kids on the weekend. There was one guy there who I just absolutely loved. He had the best sausages and he also grew garlic and had all these uh boutique vegetables, uh or heirloom vegetables things, uh ray bradley and uh, we'd go to his farm, take my kids and go to events there, and he was explaining what he did and it was really about moving.
Speaker 2:He had chickens and pork and a variety of herbs and vegetables and he was moving his animals through the land to regenerate it, and he wasn't using some of the language that would probably get used now describing regenerative agriculture. It was, you know, no chemicals. It was you know this was like bad flood land that I'm gonna do my, do my um, gonna farm and nurture it back to health, and I'm going to use the animals to do it. Uh, I'm going to plant these. Uh, create an ecosystem that's perfect for these heirloom vegetables so you had a good introduction, kind of a hero.
Speaker 2:Yeah, you had a good introduction yeah, you had a good introduction to the region.
Speaker 1:Yeah.
Speaker 2:Yeah.
Speaker 1:And the reason I told you that story.
Speaker 2:Oh sorry, yeah, no, so I was able to adapt to talking to Ben and you know I just you know we hit it off. The reason I told you that story was because it was called Bradley farms. But they had these shirts with a picture of Ray and it said fresh and dirty and he was holding a potato or something. That is not the name of dirty clean food, but I remember that is when I first heard the term dirt used in like with a little bit of a cool spin on it, versus soil, and I liked it. So I was much more open to the idea of dirty clean food later, when we were trying to name this. Yeah, I didn't answer your question, which is I warned you that I can ramble.
Speaker 1:No, we're getting there I feel it we're getting. Like what stayed was wide open when you met them and I think you answered it that dirty clean food wasn't there yet, or at least wasn't named, because that came out. No, no, it wasn't there yet, or at least wasn't named because that came?
Speaker 2:No, no, it wasn't there. They had wound down the direct-to-consumer part of their business which they had called. It was called Food for Reasons. So they had tried to do basically delivery from this shade house to folks' homes and it hadn't worked commercially. So they were kind of incubating new ideas. It was really good timing. Um, they, they had, um, they had, they had several ideas they were working on, including, you know, a real estate sort of acquire farm, transition it from conventional to regen and, um, some some consumer products using lupins that they were working on.
Speaker 2:Um, and I kind of said, well, how about? Sorry, I told them my background. I know this is really weird. You know that there'd be an American with this background who drove all the way down here, but, um, I moved here because of the renter and, um, this is my background and I'm willing to know, take a chance on me, don't? You know? You can just pay me a little or we'll test it out. Um, but I promise you I can build you a distribution, commercial distribution system. That is like what I do. Um, and that that was how we came out with dirty clean food. Um, we hadn't named it at that point, took a couple months to come up with a name. Um. Believe it or not, we paid a uh an agency. Uh bought lots of money to come up with pretty clean food, um, but it's a really good name.
Speaker 1:Yeah, it's a really. I mean we, I think food, for reasons, I mean, naming is very important. Like we have to sell this stuff well, and naming and communication and narratives and colors and and how much we, we I'm not saying but how much some people really don't like the, the quote-unquote marketing and storytelling, that's what's going to move people to buy it and and so, and taste and flavor. You have to deliver, obviously, but it has to be presented well and part of presentation is naming and I think we recognize things when like, oh, that's smart, that's good.
Speaker 1:Of course, this tastes good and all of that has to be grown well, but it starts with not a boring name, not a. I mean, even in podcasting, we by accident chose a name that describes the podcast. Luckily, because there's no search engine. So, looking back, it's really, really fortunate that the name of the podcast investing in regenerative agriculture and food actually says what we do, because that's how people find us. If we would have chosen a super spiritual, vague but very nice name, then we would have actually been in trouble. So, yeah, just do a small rant on naming. It's important and we need to, not saying that you should pay an agency, but think carefully and it's important to nail that and get it right.
Speaker 2:Yeah, no, it was. Uh, I should probably uh give props. The agency was called meerkats and they were. They were fabulous um, but uh, the um not cheap. Yeah, yeah, no, um, and uh, yeah, I mean um that the the business. So so, basically, dirty clean food was one of about three concepts. Getting incubated and um, uh, I was running around in a, uh, in a pickup truck which uh is called a ute over here. Uh, with we tried one farmer, let's try one one farmer, and that man is an amazing farmer. His name's Warren Pinsiniansini of Blackwood Valley Beef, and Warren and I drove around in his ute finding our first customers. We set a challenge of can we sell three cows and can we convince enough people to buy three cows a week for their, their restaurants or grocery stores? Uh, at that time, and in parallel, I was building the website which you know obviously would become the what after covid, the the main source of uh sales.
Speaker 1:But um, yeah, you were running one of the concepts or all three, or there were different concepts incubated, just to see, like how did that process work?
Speaker 2:um, there was about three. At that time. There was a basically like consumer package good strategy which was a? Um, a falafel mix using lupins and a uh and a meat bar in a pack uh, I think the epic bar might have been new at that time, so it was sort of uh, hey, because there's something we could do. You know, that's Australia unique uh, play on this so that there's the consumer package good incubation. There was what I was doing with Warren and then there was um something called land for reasons, which was, um, you know a pretty bold idea. Where you're, you're basically matching um environmentally motivated investors to purchase land and uh, land and wide open, would manage it with regenerative practices and have the four returns, like you would hear from the Willem podcast financial returns on the land but also the natural returns you want me to repeat the four.
Speaker 1:I don't think we can repeat them enough, just to emphasize the pretty revolutionary model, of course, standing on the shoulder of giants. They didn't invent anything but they made it very. They gave us a language, I think, to talk about different returns, and language to talk about landscape scale restoration. I think that's again not to underestimate what words mean in our culture and in our society.
Speaker 2:That's a really good point. So for those I'll repeat them it's the four returns for long-term landscape restoration. Our company, dirty Clean Food, applies regenerative or supports the regenerative agriculture community in Western Australia to to affect this, and the returns are financial, obviously, because we're a business social, inspirational and natural returns and most of the time when people hear those, you know, I think, I think social, natural and financial people immediately leap to connect it. But just talking about the importance of words, that word inspiration means a lot of different things to different people in the network and to me and to people in my company, and it has turned out to. For me, it has moved from kind of a word I was struggling to understand in the model and framework to really the whole thing. What does it mean? Well, for me what it means is and obviously I'm saying this to you, cone, as founder and CEO of Dirty Clean Food but for me this whole project and company has been about um, we can, we can build a new way to help people access food that they feel good about and it's good for the planet. I mean, um, and that's great, uh, we're going to do it in our local community. But if we can do it successfully commercially, uh, as well as with data showing improvement in land then in the world's most isolated city. So capital city, at least I can make mistakes in Perth, which I've made plenty. It's a protected space to try something.
Speaker 2:If we can figure out this model and make it work commercially here, then it can work anywhere, because Perth is a big city. Of course there's wealth in Perth from mining, but it is a challenging city from a logistics perspective and it's a challenging area in Western Australia to grow produce and actually improve the soil. This is not so easy. I just opened this conversation talking about red dirt. So for me, inspiration, I mean I think inspiration, hope, I think wow, if this can actually work, then it has so much it could inspire other people to try in local markets, and I want to. You know it doesn't need to be dirty, clean food. Conquering the world. We want to be helpful and partners and share what we know has their own personal connection to inspiration. So I just, I just find it really powerful. It ends up being a super powerful word because you can personalize it, um, and align it to your soul and we're definitely going to get into what you're learning, what you have learned, mistakes to avoid opportunities, etc.
Speaker 1:But just getting back to to you were going around with with this farmer and your challenge of three cows a week, how did that go?
Speaker 2:uh, it went really well. Um, I, I did make some mistakes, um, you know, part of it was so I, I was, I was pretty confident I could sell three cows, although I hadn't done it before, um, because I just done a couple startups. How hard could three cows be? Uh, you know, um, the biggest challenge for me was sort of I'm an analytical, uh personality type, so it was kind of remembering how to sell and like refreshing that part of my uh personality. Um, so I, I believe it or not. I I pulled out, you know, the three books that I read when I was 22 to figure out how to sell, to overcome the same problem, and prepped with all that. But what I basically did was warrant well, before we went around a forum but in prep for this was I called 30 businesses um, half grocery stores and half restaurants, and found out or walked in and found my way to talk to someone and I didn't sell them. I just said, hey, I'm thinking about doing this. Do you think?
Speaker 1:that's like the grower or the farmer, the ranch, I don't know how you call livestock farmer in australia. Was he known? The quality was known, or did you also have to quote, unquote, sell that? Or how did you make sure, like this was not a artist, sustainable and it's interesting beef. Now this is, this is a quality product, grown in a way that actually grows the quality like. How was it? Was it an easy sell, let's say?
Speaker 2:or also, there you needed to to overcome something uh, I would say it was a slightly easier sell than your typical situation. Warren's brand is called Blackwood Valley Beef. He had a brand. It wasn't in every grocery store, it wasn't on every menu, but it existed. So he had a group of former uh, former customers.
Speaker 2:You know that that we could call on Um.
Speaker 2:They weren't in my sample because I was relying on him for that, but um, the uh, what I, what I found and I would I would advise anyone to do this at the early part of your startup is before you're in the pressure of I need to sell this. You know, at the early part of your startup is before you're in the pressure of I need to sell this. You know, go talk, don't ask your friends and family if it's a good idea, like, figure out what you want to do and go ask. Go ask a couple of people who you might want to sell to Um if it's something they might think about buying. There's no pressure. They'll tell you what they think. Uh, as long as you're not bothering them in a busy time, and adjust as needed. Um, after you've listened to you know, and do it more than a few, like you got to actually spend the time to do 25 or 30 because, like a key lesson, one person can take anything, take your notebook, and, and sample size is important.
Speaker 1:Go and talk to people, don't bother them. Find a moment when restaurants, etc. Have their shifts and have their moments. Find a moment when it's not, too, and distribution and supermarkets and grocery stores as well, and and spend the time talking and listening and. But don't do two or three and think you have found the miracle, because that's not. That's not. The sample size is too small.
Speaker 2:Okay, so 25, 30 is a good. You got to think back to your high school statistics. You know you need a minimum sample size of 20 to have any kind of usefulness from what you find.
Speaker 1:But um, I'm really enjoying this because we're gonna get we're getting inspirational, spiritual and super practical, and combining those two, I think, is gold.
Speaker 2:So let's keep going, thanks um, so the good news was you, you know. Yeah, of course everyone said that they would like to have a delicious, eco-friendly, you know product, and so that was good. But the secret was then, when I came back with Warren a couple of weeks ago, we first hit up his friends and of course they wanted to help him and we had a good start. But then I went to the other 30 people who were so nice to give me advice.
Speaker 1:This lonely American walking around asking for advice.
Speaker 2:Yeah, and when I come back with the actual products, you know, a few weeks later they wanted to help. You know, they sort of felt like they hadn't promised to do anything, but they sort of we were starting to grow much.
Speaker 1:And why was Gordon working with you? You said he had former customers. Why weren't they customers anymore? Why was it difficult for him to as he had a brand to do the distribution?
Speaker 2:That's interesting and I think it's pretty similar to a lot of the farmers we work with and it's why we didn't plan this out. I'm not trying to set me up for a sales pitch, but it's why what our brand does is important. Warren is a great farmer. His beef is amazing. He had a brand. He was in the farmer's market and selling extra to a few grocery stores and chefs and the higher end of things.
Speaker 2:And it is really hard as a family farm, a small business, to be a farmer and then go drive to the city and sell your product. It is very time consuming. Anyone you see at a farmer's market, you know think about what time they had to get up to bring everything into that stand and you know how long it took them to set up before you got there and how long they have to wait and then take it all home. It's a lot of work and if you add that process to you know 20 customers in the city in various points, you know it's really time consuming and tiring and it's farming is already hard and regenerative farming is all is like, you know, farming plus. So, um, a lot of our, a lot of our first farmers you know were were like Warren. So where they had, they were still farmers, but they had to pretty much settle to outsource um the sales of some of the produce through the, through the channels available. His beef was being sold um resold uh in a to a competitor uh to us, uh into food service restaurants um, for I went around with him and it was disappointing. He didn't get paid as much, he got no credit um in that situation and uh, it was just, you know, it didn't really feel like what he was doing and all the hard work to produce this high quality product is getting recognized Um. And and that makes sense because the big, the big, this big company, who I'm not going to call out um, you know, it was just one, he was just one farmer of a bunch and, like his, the amount of cows he could give them was limited and they couldn't give him the sort of uh, they couldn't put in the work required to really tell the story of why it should pay more Um. So so for for what we were doing, that was a good opportunity because, you know, we I was willing to put in the work and for me, selling Warren's three cows and eventually, you know, 15 was was definitely worth it. And and then you know, multiply that times, you know three or four of our first farmers.
Speaker 2:It's a really similar story Chicken, very similar. You know a great family farm. You know a brand that had been known, that was, you know, struggling to stay in market beyond their local farmer's market and then you know welcoming a partner to help them sell in Perth. So Western Australia is really big. For everyone who's sort of trying to picture it, I think it's like four times the size of Texas. But most of these farmers I'm talking about are within two or three hours of Perth, but even still that's a long way to go. Imagine the time.
Speaker 1:Some of these markets. It's not that you're going to go and deliver at a restaurant every other day. It just doesn't make the sense and so fast forward. We don't need to do the full story of dirty clean food. But where did you land eventually? And why did you decide to do basically a management buyout, which we ended up playing a small role in with our syndicate? But what happened there? No, not to plug this, but just to again say skin in the game and definitely biased. Not the reason why we invited you for the podcast, because I think there's an interesting story here. But how did that develop beyond the three farmers and then 15 cows, and then other products, obviously as well, and some export. Like, how did dirty clean food through covid? Because of course that's been, I can imagine, a roller coaster in direct to consumer or direct to to, let's say, almost end consumer markets. I think it's been a couple of interesting years. What have you seen there?
Speaker 2:um, yeah, it's, this has been a ride. It's definitely my favorite startup experience so far, probably because I'm well, I don't know. I just feel I have a really good food out of it Attitude I do. You guys on the podcast can't see that I'm let's just say that I'm not skinny, and eating really good food is a big part of this for me.
Speaker 2:So, uh, but, um, the uh, the first year, uh, so we got through that first little stretch and it was, you know, we. We rented two pallet spaces, uh, chilled storage, and we said, uh, you know, this is all we're going to need for six months. And you know, within six months we had, like the whole bay, uh, rented out because demand was was really big, um, so it really took off very fast, um, but still from a small, you know, from zero. So from a small uh base. I think we did a little over a million dollars in the first year.
Speaker 2:And then, when COVID happened, uh, every place on earth probably had a different COVID experience, but for, in Western Australia, the strategy, there was a, there was the panic that we all remember where everything shut down, um, restaurants close.
Speaker 2:Then he didn't make it, uh, but that period was time compressed in Perth, um, because Perth's strategy, or Western Australia strategy, was to close the border and, um, basically go, um, you know, let the first cases play out and then, and then keep it closed, so another get in, gets in, and that and I don't want to get into the political ramifications of that but, um, for a while that looked like it was working, but, regardless of your opinion about it, like that's what happened for two years.
Speaker 2:And, um, uh, so for us, um, yeah, we walked in and, uh, you know, our online business was growing fast and it was tiny compared to 30 restaurants and, um, you know, the whole book order book was gone, um, on Thursday and, um, thank, I mean, you know, really fortunate in a time that was hard on everyone, uh, that we had spent time, you know, building an online distribution channel, uh, already. So we were, you know, we're ready to go, uh with this, and we had a packing room and procedures, um, and then, because you had to shift from restaurant and food service to consumers, which, of course, is completely overnight.
Speaker 1:Yeah, we had a talk with henry dimbleby um, he was non-executive director of defra in the uk when that happened and he led these discussions at 9 or 10 am in the morning with all the food companies and distribution etc in the uk to keep food at the table, to transition all that food from restaurants to supermarkets and figuring out where to get smaller flour bags, because of course, the big ones don't make sense, and all of that. I think it taught him. But us in general, like the flexibility of the food system if we really want to, is amazing that we didn't learn a lot about it after that is amazing that we didn't learn a lot about it after that we forgot. But there's a there's an incredible flexibility if we we need to manage a crisis like that. But you were luckily ready, because if you don't have a packing room, you don't have a website nor a web shop.
Speaker 2:Then good luck, of course, yeah no, I mean you're, you're, you're really right and um, you know, I've obviously we read the news, so we knew something like this was likely to eventually happen. But I still think there was this in Australia. They got this saying like she'll be right, and it kind of means like, oh, it's going to be okay, don't worry about it. And it is said really cavalierly in a lot of dangerous situations when it comes to crocodiles and other scary things. But there was a kind of she'll be right attitude.
Speaker 2:And I remember talking to a chef, uh, like two days before, and are you sure you want this order? Like don't you see what's happening? And yeah, yeah, yeah, be fine, uh, I should be right. So, um, anyways, but meanwhile we're we're trying to organize. How can we do this safely? If this, this happens, what are we going to do? But yeah, on that day, like 75% of the business was gone and we were very worried. I will have to admit we had an internal conversation and I just said, if this happens this way, like I don't know Even though I'm the e-commerce guy like I don't know if we're going to be able to, like I don't know what we're going to do because we have so much product, um, that has to get repackaged and um, and we have, you know, all these fixed costs that are set up for restaurant delivery. I don't know what we're going to do, but, um, what was the biggest challenge? Yeah, what was?
Speaker 1:the biggest, the big on the long list? For sure, long list. But what was the biggest challenge On the long list? For sure, long list. But what was the biggest one? If you had to say, oh, I wish I prepared more for that, like packaging or software, what was the biggest?
Speaker 2:or personnel, Um, honestly, I just feel like we got. I'm sure we were well prepared, I'm sure we're better prepared than making this sound. I just feel like I don't have that many regrets about that COVID time from our business perspective. Um, you know, we did. We did what I was kind of alluding to. We did start packaging things in single size and freezing them and clearing out product uh, that wasn't in the right size as fast as we could, leading up to, um, that date.
Speaker 2:Um, I would, I made friends with butchers so that, uh, the stuff, so that I could quickly, um, you know, sell things that I couldn't turn into a single product fast enough and, um, but what was, I think, probably more than a regret, is what was really cool was, um, we built a team that was really passionate. You know, and I'm sure you've talked to a lot of businesses, if you're in this industry meaning it's associated with regenerative agriculture or somehow, uh, an impact or for purpose business um, I mean, your employees are dedicated, or they should be if you're hiring right, and so we had a team just like you wouldn't believe, buckle down and say, okay, we're going to get this done, we're going to change our schedule, we're going to. You know, let's take what we're doing for our few online orders and, like, literally, they would come hit me on the phone because they were so small, I'd get a little buzz, um, to make sure I didn't we had missed one. And uh, I can still remember that sunday, uh, I mean it's just, my phone was buzzing just non-stop, uh, because I finally figured out there was, um, everyone remembers there's no toilet paper in uh covid, but uh, there was a run on uh, ground beef mints, they call it here and uh, I went shopping, uh, and there was no mints anywhere and I had literally had I mean, I'm not exaggerating I had a ton of 500 gram packs of mints, um, which I would like to say was in preparation for this, but it was mainly because it was hard to balance the animals, and so we always had extra stock and if you froze them, figured that we're going so fast, that deal for later.
Speaker 2:And, um, we put our whole ad budget, uh, which you know wasn't a lot, but we shifted it to we have minutes, basically just screened it anywhere we could, we'll bring it to your house tomorrow safely, uh, and the orders just were flying in and then, um, it was us.
Speaker 1:Practical question what did you build on and what have you learned there as well? I think many didn't have the online systems in place or the stack and just collapsed Like websites, collapsed Like nobody was ready for, of course, the physical distribution, but also the online distribution. I think we struggled Like what was your? I know we get very nerdy, but what was your lesson there? Did the website go down at some point or not, and if not, why?
Speaker 2:It didn't go down. We were using Shopify so I think we might've had to upgrade. I don't know if it would have gone down or not, but I think we ended up having to upgrade to Shopify because we had so many orders that we needed access to more features. Probably the most challenging practical change was when you go deliver to 30 restaurants, you have 30 drops. When you sell the same amount of product at $100, $150 a pop, you're suddenly going to, you know, a hundred plus 200, 300 stops. So we had to buy a um, they could have routing software uh at in New York.
Speaker 2:Um, my partner uh was uh, max delivery was a genius with technology solutions, so never did it. I have, you know, anytime I had a problem, you know, just look over at Chris and say, hey, is this possible? Can you do this? And you know, sure enough, sometime in the near future there would be. Maybe it wouldn't be pretty, but there would be like a highly functional, dependable way to do it. But here, you know, we had no tech people, so we had to interview some, some firms. We ended up using a logistics software that I think some trucking companies or delivery companies were using around and that made it work for a little while.
Speaker 2:We've since upgraded that, but, yeah, I would say that was the biggest change because suddenly, your planning of how you execute the logistics I had to default back to. How did we do this when we had, you know, a thousand orders a day at max delivery? Because it's it's no longer. I used to just add these two really awesome teammates, pete and Jody. I used to say, pete, you go south of the river and Jody you go north. Here's the pile of orders you know, divide up amongst yourselves, and that strategy was over. But yeah, I mean, it's amazing what is available now. I mean, I think one of the things that we're excited to share as we try to grow in new cities is that there are really robust cloud-based tools and they're much better than they were even five or ten years ago. So if you put together the right combination of them, uh, you can exist, and it it may not be as perfect as hey, chris, can you fix this? And then, like magic it appears, but like it is functional and scalable.
Speaker 1:If you don't have a crazy life, yeah, yes but, it's a good lesson, it's a very interesting, like the stack for direct to consume or direct sales. That technology stack exists, which is it might not be the prettiest, but it's robust, it's cloud-based, it's not on. You don't have to pay developers to build it for you. You don't have to personalize everything. I mean you have to personalize, but you don't have to um personalize everything. I mean you have to personalize, but you don't have to to uh personalize code etc. Which is always a pain. And maybe five to ten years ago your default was okay, we're gonna hire a development company and build something ourselves, etc. I know you're saying I wouldn't advise that because actually the the tools are out there off the shelf with a bit of tooling pulling together, but but you can build a really robust stack to sell. And you'd notice, like I don't think if you weren't on Shopify, if you had your own shop at that point, probably it would have crashed. I'm pretty sure I think you're right.
Speaker 2:I I mean I don't want to turn to a Shopify commercial, but I I mean it might happen again.
Speaker 1:But in like these kind of moments where you need it to work and if it wouldn't have worked you would have been left with a lot of mincemeat.
Speaker 2:That's the it worked and it was. It was good enough. You know, I I have hardly any complaints. In fact, the only complaint I have about our tech stack right now is something we did pay uh, fifteen thousand dollars to get um custom coded for for us in the first year because I really wanted to be able I can't remember why, but I really wanted to track what postal code. Because I had the vision that I wanted multiple sort of delivery. I wanted to be able to adjust the delivery route based on postal code to make it rational, but without showing it. So I wanted to sort of have that all tracked so that we could, you know, automatically do that to make it more efficient.
Speaker 2:And, um, so, yeah, we paid some firm and they coded it and um, yeah, that is the only piece of our website that I hate right now and it's still here. It's five years later. We've had two other firms try to fix it and you know it's better, but it's still like the worst part of the checkout is as a result of this custom code. It's the only thing I did, custom. I wish, wish I had never done that, but um, anyways. So, yes, I highly recommend spend the time to find the best cloud-based solution like this. You know there's so many startups in this world. Uh, if you're in a consumer business, someone else has had your problem and and some app and shopify has fixed it already.
Speaker 1:So tip number two after one, we're going to repeat it do enough potential customer conversations, interviews, whatever you want to call them. Uh, less than 20 is not enough. Tip number two there's a lot of really good, reliable consumer facing or consumer um, direct to consumer technology stack tools out there so you can build your stack and then fast forward. So you go covid boom. Then usually there's the, the covid bust after in many of these stories. What happened there? And then what happened to make you decide to to take this private, because wide open ag is publicly listed, which is very normal in the australian market, just to not that they went to the nasdaq or anything, but it's normal for a smaller company to be publicly listed and you decided to do a management buyout of a piece of that. And that's why we're talking now as well. And but let's say what, what, what was the right after covet or after the first lockdown? Yeah, and of course, second and all of those things, what, what led up to the management buyout?
Speaker 2:the, uh, the, the, the phase after covid. Um, sorry, I didn't mean to pause, I was just gonna say the. The thing I remember about this would be another lesson, I guess potentially, um, but we're, we're the for returns business, right. So how we behave in business is a really big part of who we are and we have this advantage, right. So I mean, I'm sure you know of a gazillion little startups all over the planet that started off delivering stuff after COVID, after COVID, but in this city we had the fridges and the freezers and the trucks and the infrastructure and the website, and what we did was basically turn it from. You know, because it was still just me and Warren and one other farmer. So what we did was turn it from a basically a beef box service to an online grocery, by forming real friendships and partnerships with everyone else who had to stop going to their market and who was stuck at home and suddenly their business was hugely disrupted. We said, come, put it on here. And you know, I really this is not in the regenerative food category, but we've made up this thing called friends of dirty clean food regenerative food, uh, category, but we've made it this thing called, um, friends of dirty, clean food. So some of my, some of my friends that I met, uh, who sold the most ethical fish in town that we could find and the best quality of the other good chefs were using, um, you know, were really nice to me and introduced me to a bunch of chefs when I was getting started. So I said, hey, um, you're a hundred percent restaurant, right, what are you doing? And they're miserable. I said I don't know how this is going to go on, but I know my orders won't be big for you, but we'll sell your fish in individual-sized packs under your brand, because our brand's a Regen brand, and we'll employ your drivers for as long as we can because we've got a lot of online orders.
Speaker 2:A lot of people, yeah, yeah, that time's calling all those people who have, you know, kind of been a fanboy up at the farmer's markets that have been to saying, oh, it stinks, you can't go to the market. Like, I'll buy your eggs, um, and we'll put them online and um, and so suddenly we moved from solving a problem that was there was no mints to having, you know, hundreds of products or a virtual farmer's market in a really short amount of time. And then, as we came out of that period. Oh, the other thing I'll just say is that some of our restaurant customers this worked out pretty well you know we said, hey, that stinks. You know you guys can't, you know you're not open. But would you like to make us ready-made meals? Cause we have all this extra product and you know I can either sell it to a butcher or I can sell, sell it to you and then buy it back from you and value add it and sell it to families and bring it to them and, uh, for healthy meals, and so I think this kind of like it sounds like something everyone says and I totally get that.
Speaker 2:But this kind of look for ways to collaborate and build a community of people who are like minded is is really powerful over time especially. Yeah, so when COVID reopened, we suddenly had all our chefs come back, because everyone's so and the fins I mean the fish guys I was telling you about are extra nice because we were extra nice, and the chefs that we uh gave that business to we're talking about how great we are and everyone who had our meat and all those other partners. So suddenly, um, we didn't have a COVID bust Like we. We grew heavily after coveted, um, and then we got back even more chefs really quickly. So it was, it was a situation where, um, I mean we were just, it was a horrible time. We were all just trying to work together, survive for the perth food community. But, um, yeah, business-wise it was, it was a good decision and birth is big and let's just.
Speaker 1:I think it's two to three million people here. You're going to correct me now, but it's not a small.
Speaker 2:Yeah, yeah, it's a yeah two. That's a good guess. I would have guessed two and a half so, but very long north to south it's.
Speaker 1:This is why I still it's not 200 000 people, that's, I think, like it's a, it's a massive, pretty wealthy um, lot of farms around, I mean around two to three hours, so it, you have a base at least. And so what led to the management buyout then? What was the the reason?
Speaker 2:you say, okay, I need to take this, this private um and um, yeah, this, I need to take this baby baby to the next phase yeah, I mean, I look, I, I, I really I hope it's come through early in the conversation I, I have a lot of uh love for wide open agriculture. I mean, I showed up, uh, you know, in a new country and met some people who had similar values and uh and I liked have a friendship, um, and we built the business together. They also were pursuing other other ways to commercialize uh, regenerative agriculture. So, um, coming out of COVID, dirty clean food keeps, keeps ticking along in terms of growth, but, uh, it's not yet profitable. And but it's not yet profitable.
Speaker 2:And the overall company really saw an opportunity to invest in plant-based foods, which also has a powerful environmental story, and the two strategies had some tension. I just spent a fair amount of time talking about beef and you can see how that might not jive well, but we gave it a shot. We tried to include, you know, do an oat milk through the Dirty Clean Food brand. I think it's the world's only well, I don't know if it's still true by the time it was the world's only region oat milk and it was. I think we missed being the first carbon neutral oat milk, uh, by a couple weeks, um, but uh, so I think minor figures might have beaten us to that one. So, um, good for this good brand, um, so, but it was. So there was that, uh, which which really took us, and you know I was very. I mean, if you had met me during this oat milk period, I would have been trying to sell you oat milk all day and talking about how great our oat milk is and how Western Australian oats are great and the regenerative oats you know have to I don't from our farmer have no fungicides and how much bad stuff is in everyone else's oats or whatever, but you know. So we gave it a really good shot and, um, we got distribution pretty fast. It grew quickly. So a lot of the, a lot of the growth and kind of the tail end of 2022 was was from distribution agreements and and oat milk, um, but it was a really competitive market, um, and we just weren't big enough to to be a CPG global player in the way that that we were. But we, what our most of our success was based on this goodwill we had built with the in in our local area with the brand. So, um, that was certainly a learning lesson.
Speaker 2:And the other big plant-based project for wide open agriculture was lupins. Lupins are really I haven't talked about lupins in several months so I might be a little rusty but Western Australia grows a lot of lupins and they're high protein. They are used in sheep feed. They have lots of nutritional benefits and they're great in a regenerative farming rotation because they naturally they create biological nitrogen in the soil, which is, you know, home run. So I got no problem with the company deciding to focus on that.
Speaker 2:In the context of how big the plant-based foods industry was, is, and even if there's a you know, call it a bubble, that burst or whatever you want an investment surge that is pausing or whatever you want to call it. Like you know, it's clear it's a growth trend and my view has always been well, the first generation of foods didn't taste that good, so as it tastes better, more people will eat it. You know food has to that good, so, um, as it tastes better, more people will eat it. Um, you know food has to taste good, um, and one of the key selling points of Bunting protein was that you could add uh protein to some of these products and it had no taste, uh, and it blended well, so, uh, it was a good. I believe in that product, uh, but, um, the that I, my baby, the thing that I created with a, with a, with a group of amazing team members, was was being neglected, um, including by me, because I'm focused on, yeah, because you're spending time elsewhere.
Speaker 1:You're being the ceo of a publicly listed company and your baby was part of that. It was part of that, yeah, but didn't get the attention and the love.
Speaker 2:Yeah it didn't get the attention and so, um, you know, the strategy to be a global someone in plant-based foods is capital intensive. So, um, you know, we, we as a, as a company, when the parent company, we raised a fair amount of money but, uh, relative to a. But, you know, in order to be selling this new protein and competing against pea and soy, it is a big, capital intensive program you need to be raising money multiple times over several years. Also big chunks of money. You have to um or find a well, well-heeled partner to who wants to make it for you and um, so that was really time consuming, um, and and difficult Um, but the product was, is, uh, it's really strong and so, um, but I think, probably, looking at my, my life and myself, uh, my love was in this food brand and sort of the feeling of goodwill.
Speaker 2:You know, all this stuff I've been talking about in this interview and and the other product, um, is really about um, global selling and big food. I was traveling all the time um, raising money all the time. It felt like and um, for a good cause, for good people, but it was hard um, and I think, probably just looking at the team, sorry, but practically what happened was it was hard to raise enough money to do lupin and dirty clean food, and so the obvious choice for the company that has recently raised big amounts of money for plant proteins was to pick plant proteins and close dirty clean food. And so I, there were, were. You know, obviously this is a heart-wrenching decision for everyone. So this kind of back and forth went on for a while but, um, you know, ultimately, um well, I couldn't let that happen, um, so I um figured out how to borrow some money and um made sure I could get enough working capital to uh get it going and um, you know, went all in to and just said hey guys, um I get it. Like, honestly, I've tried really hard to make this work um, with both businesses, uh, but you know, it's obviously not going to with this amount of cash and the criteria we have.
Speaker 2:So, yeah, we did an investment banking process for third party that our CFO did because everyone knew that I loved dirty clean food. So it was arm's length and it didn't yield any. Basically, most of the people who thought about buying it thought it was too complicated and too specialized and it would need a manager of it to have any chance of working in their system. So by the time it rolled around, it was going to be worth negative, whatever cost, to get out of lease and severance and and and wide open had a good product. They wanted to go with Um and you can obviously hear some sadness in me cause I, you know I had those relationships for a long time and also, you know, ceo of the company, trying to do both and I couldn't get both done, um, but uh, it also created an opportunity to take something that everyone really liked and you know, take it private, where there's less costs, and have it be its own strategy, because it showed really powerful growth potential.
Speaker 1:You've been on it for a few months and it wasn't profitable, obviously within the larger group. I'm not saying it's profitable now, but what? What have you changed? What is different now in terms of apart from your time and energy, fully on this, obviously what? What has changed in the last couple of months?
Speaker 2:well, I think well, in the last couple of months, the the major thing that's changed is the, the energy of the team. So I mean it is hard to go to work and feel like your second fiddle. So the people who stayed through a really tough last year, I mean it feels like it did in the office today. It feels like it did in 2021. And in 2020, when people were coming in early to figure out how to deal with COVID. You know there is an energy and excitement there. It was almost like a new lease on life for the business and I mean but not just from a commercial standpoint but from, you know, people who are really worried about their jobs and about their future.
Speaker 1:Yeah, you might close down end of 23 or something like that, or beginning of 24. Or be sold to whoever who knows.
Speaker 2:Yeah, and so there's a really high energy. So what you get with that is better execution in every facet. Because the things I did kind of quickly were I mean obviously we did the things you would imagine. Things I did kind of quickly were I mean obviously we did the things you would imagine, which is, you know, cutting costs and, um, uh, you know, trying to come up with more efficient processes and resetting the metrics we want to use for success, but, um, and sharing those. But I think what I did really quickly was I said, yeah, I am the one who bought this, like I took it private, but like, uh, you all um, kept this company going during the focus on lupin and um, so I get 10 of the company to employees, like on the first day, and, um, sorry, employees and our farming partners, um, and you know great, you know not. I'm not saying I'm so great for doing that, I'm just saying like it was.
Speaker 2:Uh, I think what was probably more important for the morale and the motivation of the team was hey, we're in this together. Yes, this has happened. We still have a lot of work to do, but if we are successful, we're all going to, we're all owners, we're all going to be a part of it and I'm going to ensure that we keep it that way, and I'm going to do this before I raise money. So you're taking from me, not from other people, and we're going to figure out how to do this, and I'm going to share a few of the metrics I think are going to work, and it's not just to one or two people, it's to a team of us. We're going to track them in really big and simple ways and for me, the metrics are just so we're talking about the same thing, or you know, what I'm talking about is we're we're a delivery business. We sell things, we, we pack them, we, we send them off.
Speaker 2:So it's really just you know what's your average order? How much do you make on a gross margin, dollar basis, for that order? That's the amount of money you have to play with in terms of how much it takes to get it to where it's going, and you want to be left over with something that's double digit percentages. So, really, breaking that down at every stage, what's the cost to pick an order, pack an order? How much time does it take? Why does it take that time? Anyone have any good ideas? Like just really, I mean stuff that you would think about.
Speaker 2:I mean, yes, I'm coming from a framework of you know technically, you know I've probably done the thousand hours to be an expert or whatever that saying is, but like I'm coming from a background of this kind of logistics, but also I feel like the main change was hey, we're all in it, we're going to be totally transparent on the metrics we need and everyone is um going to commit and here's why Um and you're all going to own some of the company immediately and if you quit tomorrow, you still own it. Thanks for last year. And this is all starting today with a fresh start and, um, the buy-in was huge. So when you have that kind of buy-in, people coming up to you who last year were scared to talk to me because I'm CEO of the company and uh are saying, hey, I, you know, I noticed that, um, our bread order is too big.
Speaker 2:You know that's a small example, right, that saves me. You know, 50 or $60 a week, but uh, time, multiple. I'm a real big believer in small improvements, multiplied times, tens of thousands of actions, um, so, yeah, cause any any consumer business has has a breadth of products. So you know that person's name is Kevin. He's amazing, uh, you know, and he probably found 25 ideas like that, uh, and you multiply that times the 30 people in the company and the 30,000 orders we deliver a year and we've just really seen a sort of network effect, or I don't know what the right term is.
Speaker 1:But a quick acceleration and buy in in a way that Incremental changes Toyota, whatever the terms, toyota whatever the terms, yeah, but like, everybody's on board and everybody has transparent access to all the data and thus is incentivized, the 60 bucks really matters because you know that you're actually not profitable yet and you know that your salary and your 10% all shared with the farmers, so it depends on that. I think there's a very big. We had a long discussion with Abby Rose of Sector Mentor mentor on that. She went full transparent with her team small technology company fascinating uh solutions for farmers made by farmers. She's a wine grower in chile, um, and she went full transparent on um, all the on the financials and did the training with the team as well. Like what are we actually reading here? And and she said, yeah, we raised some money, actually through a revenue loan, a revenue-based loan, and now, with the whole team on board, we have those discussions.
Speaker 1:Would we do that again? Because I did it with the management team and now I'm, of course, butchering her words, but now I don't know if we would do it again, because everybody actually understands how expensive that is. It was fundamental because we could hire somebody without giving away equity and it's a really good deal, and we didn't want a normal loan and all of those things. But everybody now actually understands how expensive that money was, or strange money is, and so we would think twice or three times before making that kind of commitment again, because everybody is able to read the books.
Speaker 1:And I think there's a similar one with what's the guy called in Brazil it's a four hour, no, no, it's the seven day weekend, I think and he built massive industrial companies, so cookie factory like if you needed a cookie factory, they would build all the industrial plants and they're fully transparent, from the person that cleans the toilets has the training to understand every single dollar that goes out in that company and comes with solutions and everybody's trusted with. If you have to fly overseas, you can decide if you fly business class or not, because if you weren't able to decide that, you probably shouldn't be traveling overseas for anything important because that shouldn't be your position. And fascinating company. And I'll put some links below.
Speaker 2:But I think that transparency piece is super scary, very powerful if done well yeah, uh, you're right, it's scary and it's hard to do and you know it's. It's easy for me to say that I did this in the beginning of my company, uh, at the fresh start. Well, it'll be really interesting if you and I are talking and you, you know, a couple of years after, we're killing it and doing really well, and uh, if I still, uh, am so transparent I hope I am. But, um, I will say, the more complicated and larger your business gets, the more difficult it is to do that. But in this case it was.
Speaker 2:You know, we knew each other and I wanted them to know, because they had a choice, you know leave and get paid out fairly by WOA, wide Open Agriculture, with their severance or stuff, or it transfers over to me, and this is a high risk situation. I'll be obligated to pay your severance, but it's high risk. I'll be obligated to pay you your severance, but it's high risk. And so we had a pretty open conversation where it was just we got in a room and told them what happened and I said I don't know if it's going to work or not, but here's what I see and here's what we've done over the last 12 months and here's what's different and here's what I'm trying to do. What I'm trying to do, and if it works, we're all behind this at a liquidity crisis, but if it works, it could be really good for everyone. So I never owned more than I never even owned up to 1% of wide open agriculture. I was CEO of the company.
Speaker 1:So this is a situation where a lot of people chance that kind of equity um percentage, so and so what is happening? We're now at the middle of july and this will go out soon. You're having a crowdfunding coming up as well. Um, so what? What has been? I mean, you said the biggest difference is the energy in the room, um, but has that translated into apart from saving, of course, on bread um orders, but has that translated into to other saving, of course, on bread um orders, but has that translated into to other numbers as well, to things like what are? What have you? What have you noticed and seen over the last months? Of course, very busy with raising the money to do the buyout and to raise enough cash and capital to actually stay in business, um, but what? What have you seen in in terms of execution and all of that?
Speaker 2:Yeah, so you're right. I didn't mean to just answer that with the energy story comments. The numbers are getting better. So the result of this is that there's a really high focus from the team on. So sorry, I talked about the metrics but I didn't actually tell you the name of the metric that we use. It's called engine room return. You will not find it in the SPASP accounting standards book. It's made up but it is a proxy for variable free cash flow.
Speaker 2:So what I really want everyone to focus on is, if we do, more of this action is going to like help us get closer to break even and pay for our lease and um and silverheads, or is it going to make it worse? And um, by how much? So this is the like, that's the end of the equation of gross profit dollars minus the cost of delivery. You know which is fully loaded for. You know the vehicles and the and the gas, and we track it, um and we've um. We've grown that from break-even to low free cash flow percentages a year ago to high single digit percentages now and on some weeks low double digit percentages. So when you do that, your loss narrows pretty fast. Uh, if you're growing and if you're kind of flat, then it's still narrows, but not as fast as you want.
Speaker 2:So, um, I'd say the answer to your question is that we had a quick bounce back in in growth. Um, there was a lot of excitement over the brand, um, you know, surviving and um, so we probably had a 10% sequential bump from the prior month immediately, which we've held. We have had an improvement in our margins and our cash burn very significantly. So we're not out of the woods in terms of printing money yet, but I think we're. You know we're less than 10 percentage points away from cash flow positive. So that's a very dramatic improvement versus, say, negative 30 percentage points. So why are you raising?
Speaker 1:them again and why the crowd.
Speaker 2:Yeah, so we're doing a crowdfunding raise and you know, essentially what we want to do is grow the business. So I really believe that. Yeah, I've just told you how much we've narrowed the loss, but you know, everyone is pitching in.
Speaker 1:This is, this is this is potentially and it's accessible to all. This is obviously not investment advice, but this is not just for Australians. If you're interested, find the links below to your DD and do that. But it's a high risk thing, certainly high risk illiquid.
Speaker 2:There's some kind of warning about crowdfunding that I should be reading and hopefully we'll post it in the comments, but what it is is yeah, I mean I think we're close enough to generating cash right now. I told you that story about three cows five years ago and we're doing over $11 million of turnover a year right now.
Speaker 1:Closy dollars.
Speaker 2:Did I say $11 million? Yes, yeah, dollars, australian dollars, that's right, thank you. And we're very close to break even. In fact, I think, if you incorporate some of the working capital, we might be able to show a cash neutral position in that document. Yeah, I don't count that as recurring free cash flow, because working Um and those in that document, um, yeah, I don't. I don't count that as recurring free cash flow, because working capital sorry to get finance nerd on you, but because working capital is, you know um a way you can generate cash from your inventory Um, but um, anyways, uh, we're, we're, we've, we've proven it in Perth, and actually I think what we've proven is really special. It is that it's not just hey, we've helped regenerative farmers come to market and happy to build a business.
Speaker 1:I think 6.8 million euros Like this is not small, it's not enormous, but it's a lot of money. Thank, you.
Speaker 2:But we've been in this market. You know we compete against the duopoly. It's a very strong. Grocery stores is very strong. Woolworths Australia has a duopoly structure.
Speaker 1:Like many places, I think Somehow, how does these things happen, Like if two main ones or three maybe, and that's pretty much it.
Speaker 2:It's intense, but what we've shown is that this, this idea you know I guess that started with the 30 questions, but um, but going directly to consumers is that there is a proven market that people will pay extra, uh, for food.
Speaker 1:How much extra on average? Do you know? Do you what? What's your pitch to them, to consumers?
Speaker 2:Yeah, I mean, um, it depends on the product Um, but we pay to the farmers. We pay a premium over organic Um, so in our supply, um, uh, I don't want to disclose exactly what that is, but there's a reference point of organic pricing. So in my market, um, the biggest grocery store is Kohl's. Um, kohl's has a grass fed organic line, uh, so I want to make sure that I am uh, you know, paying more than that uh for my regenerative farming, uh, crew, uh, and we use a percentage basis for that. In other categories there are different reference points, but in general, we're paying a pretty substantive premium.
Speaker 2:Certainly in chicken, some of these things that are actually really hard to do, the farming part of it, you know, we pay a fair price. We don't want to, we don't want that to be a pressure Um, and and then we charge consumers. You know, we, we, we do charge a premium. So in the case of um that example about the grass fed beef, uh, that's organic, that's my reference point. So, um, I want to pay a little bit more than them and I want the price to not look the price on shelves uh, to not look egregiously more than that Um, now we use math to make it more complicated than that. But that is kind of my gut instinct is that I want it to be a little bit less than the most expensive organic you know mass market product in the store, um, but close uh. So it's kind of anchored to that. And then in my internal uh dealings with the farmer, I want to pay a little bit more so I can secure the best quality. So in my grocery store presence that's what I do In the direct online business though there's no middleman in that, so we're able to get and we don't have storefronts and these things we're able to get a better margin in that business than when we go into the grocery store.
Speaker 2:So we can have a lower price and still be making a good margin in that situation. And then for the restaurants, you know there are different competitors but we're typically 15 or 20 percent higher than sort of our main competitor and chefs pay it or don't pay it. And chefs, you know, pay it or don't pay it, um, but in general, um, you know the the higher quality chefs in the town want to pay for that, especially for some of our marquee products, like a, like a steak. So, um, we're definitely targeting like is the how?
Speaker 1:important is the chef or the restaurant space, compared to direct to consumer, like in your, your, your, business. What's the breakdown? More or less, we don't need these, but just to understand how fundamental consumers are the consumer or the restaurant pieces.
Speaker 2:Yeah. So for me, everything is modeled after this sentence. I want to be able to choose to eat good food wherever I eat, wherever I shop in my house personally. Now, you never should build less than whatever number. This is Never build a business after your own eating habits, but that is the vision of the brand. People should be able to get food they feel good about and we should meet them where they are for being a proper extension and proper sales partner for regenerative farmers. So, top restaurants yes. Deliver to your home yes. In grocery stores, yes. I don't want to say I don't do something. That is a normal place where people access food.
Speaker 2:In terms of the breakdown and importance to me, you know, the direct to consumer business is the most important because that's where we can have the best and most. You know sort of two way relationships with the customers Um, and we can get and it's also the most profitable uh segment Um. So this perspective is important too, but I think from a brand building, it is definitely the highest value. Um, that's where we get our uh. You know the kind of customers who tell their friends about it. Um, that's where we get our uh. You know the kind of customers who tell their friends about it.
Speaker 2:Um, so, uh, in terms of the chefs, they are important. Um, they it's usually a lower margin than a large dollar order kind of customer. Um, and you know, I like to, I like to be in good restaurants, I, it is valuable to me to say, um, basically, uh, you can taste the difference of our, of our program, of the regenerative farming practices we're doing. Um, if you don't believe me, buy some online. Uh, if you still need more evidence, like here's uh 40% of the top hundred restaurants in Perth.
Speaker 2:You know, go, go, ask one of these chefs and I and I regularly throw the chefs through our social media or have events with them to reinforce that it tastes good, Um, and, and what you're getting is the kind of produce that you know, you imagine your grandmom had before all this. Uh, maybe your great grandmom's had before all this industrial uh food, complex stuff. So, uh, that, that's that's kind of so they do play an important role. Uh, the other part they play an important role in the restaurants is is balancing. Um, when you're dealing with real food, uh, you know, part of part of your job is to optimize and not have waste and get the best value in every channel.
Speaker 2:And uh, restaurants consume, you know. Know, obviously they feed a lot of people so they have larger quantities and in in my business, where I have a lot of animals in the livestock, in the products, you know, most people are attracted to a couple of things that they imagine they might eat. You know, like a, if it's sticking with the beef example, you know, you like a. You like a ribeye steak, you like a t-bone steak? You like a T-bone steak? Well, that is a very small part of the animal. So how do you sell animal? Is the trick? Yeah, you need restaurants, uh, or you need some other way to get it in balance. Um, so, you know, two thirds of the animal is is stuff that, um, you know, if the animal's meat is is something that you could make ground beef or mince out of. Um, how do you, how do you get the best value out of? That is really how you're going to have a profit versus everyone's going to buy your fancy steak. Uh, that's not an issue.
Speaker 1:I think it's such a, such a, a key point of and we've had that conversation with, I think, dan barber, even back back in the day. Um in in the conversation with him, like how to yes his famous uh rotation risotto, which of course, not on the animal side, but how in the third plate, the book he wrote if you haven't read it to anyone, highly recommend it like, how do you buy the full rotation? Like, how do you make sure as a chef you can do things there that nobody else can? Of course everybody will buy your, not everybody. But you can sell your cash crop. But if we tell farmers you need to rotate, you need this, discover crop, you need this, this crop this year, etc.
Speaker 1:Companion crops all amazing, but somebody has to buy it and eat it and process it and somehow make it into something. So I think that and and in animals it's even clearer because you cannot not harvest like you. You harvest the animal, you, you slaughter the most humane possible and then you only sell the t-bone steaks and the rest goes into animal feed. I don't think our pet food, I don't think that's what we want. And how do you balance that? And how do you make sure the organs going somewhere and how do you to the people that really want that and how do you um figure out that that dance? I think people greatly underestimate how difficult and how important, like that's the difference between being profitable and not um, if you're in the animal protein business you're 100, right that that, but you just said so.
Speaker 2:Uh, certainly, from a you know values perspective, you want, you, you've you've taken an animal and you want to have, you want, you know you should use the whole animal, um, in your process. Uh, from a business perspective, um, that that is the key to profit. Otherwise you are not profitable, um, and if you think you are, it's just a matter of time, um and from, uh, no, you, I'm kidding, no, I'm just kidding.
Speaker 2:You might just be lucky in a really good market, but at some point you're going to find out you haven't built a bulletproof business because you need to be getting extra for those parts of the animal. And then I think from an environmental perspective, food waste is the big thing. So I think of that in my own personal life, you know, as a composter, but in a, in a business, um, if you're not using the whole animal, um, you know you're contributing to that and um, and so it just makes. It makes good sense from ethics of spirituality to commercial sense and for the environment. So I uh, I really feel strongly in um, in that that part of the business, um, but yeah, it also helps that, it helps your, your returns so those are the nicest ones when they when they align I.
Speaker 1:I want to be conscious of time and ask a few final questions, but it's been such a pleasure to host this. I think we've had so many golden nuggets in this interview so far, but I want to ask a few questions. We always like to ask and they usually lead to other questions, so I will try to keep them sort of contained, without cutting off, of course, other golden nuggets. But I'd like to ask this question. Let's say we do this live.
Speaker 1:We're in birth, in the financial heart of of of birth in a theater or in a nice, nice auditorium, let's say on stage, and we are, um, having an evening, probably with some food, very interesting, a room full of of people managing money, their own wealth or other people's wealth. They're excited, they're interested, they walk away. What do you want them to remember the next day when they get to work or when they sit at their desk, open their laptop or whatever they use, and what do, what they should remember, what seed do you want to plant in their mind of the role of money in this transition? What would you like them to remember from from the evening, and what would you like them to do?
Speaker 2:well, I I love the way you worded that.
Speaker 1:I've only asked it like 300 times in the last year. No, no, the question has changed a bit, but anyway, go ahead.
Speaker 2:I mean, yeah, I would. What I would really recommend that investors keep in mind is that, you know, over our lifetimes we have seen so many changes in the industry and in every case that I can remember as a student or an investor or a participant, there are several big conglomerates or companies whatever you want to call it that have invested, have so much sunk costs in the way things are whatever you want to call it that have invested so have so much sunk costs in the way things are that they, even though they are the 800 pound gorilla, they can't adjust. I mean seen this hundreds and hundreds of times in the technology companies. But I believe that this region we don't farm, we're sales and marketing, but I believe we have a better chance than so many of the big brands because they're just not going to be able to execute that authentically without being overcome by consumer skepticism. So I know the word disrupt is overused a lot and I'll not call myself a disruptor, but I will say I think there's a better way and I think that our, our company and our brand and it doesn't have to be me, it can be the brand you'd like in California or, or, you know London or wherever it is, but the new entrant doesn't have, you know, can be, can win, uh, because the uh and can make can be there.
Speaker 2:There are unicorns for a reason and, um, you know, it's usually because the larger companies can't change and food is so like that. I mean, if you think about regenerative agriculture, uh, and limiting inputs versus conventional industrial food production like it is, that is, you know, decades and decades of invest more, build more, use science, use chemicals in order to get the most productive input that you can drop on a plant to make it grow, versus feed the soil. No inputs, like it is totally different. There's no way they can really compete in the same way. The only way that they could, and I hope they change and do all regenerative farming. That would be amazing, but I don't see it really happening without some company, whether it's me or someone else, becoming a part of that, becoming a part of that, becoming a part of that with them, or or beating them over and over and over again until they give up. Um, you know, uh, you know, suddenly, all this infrastructure, you have is worthless.
Speaker 1:It's worthless but it's an interesting point of almost like stay optimistic as an investor, even though we've seen the graveyard of direct-to-consumer. But trying to disrupt an £80 gorilla is not easy but will happen, because the chances the gorilla will be there for the next fight is very, very, very small. But that doesn't mean that this round is going to be easy like they're going to be punches and there will be casualties and we've seen that many raise a lot of money, sell direct and we've seen the booms and busts etc. But that doesn't mean that inherently this cannot work. I think that's the the part of the message here. Like this can work, yeah, when really diligently execute it.
Speaker 1:Again, not saying that's happening here. I'm very interested to see that over the next months and years how that happens. But because others feel, that doesn't necessarily mean that it's a non-concept or a non-starter. No, it means we have to try harder and differently because the current distribution, the current input companies, the current system not a conspiracy but is very, very strong. It's going to have a lot of issues to to adjust to a new, a new reality yeah, that that's a good summary.
Speaker 2:I, you reminded me of something else I want to say um, but you know this, like I just think about how much, how many industries, no matter what it is, no matter what, disrupted it, whether it's the internet or AI, or you know, electric cars, electric trains, but yeah, electric cars, good one. You know this really hasn't been disrupted yet. I mean, don't tell me that the plant-based foods is disrupted yet, because it hasn't. It has, it looks like it will, and that's great. That plant-based foods is disrupted yet, because it hasn't. It looks like it will, and that's great, but it hasn't been fundamentally disrupted yet. And the last time it was really threatened was organic, sort of the rise of the organic food movement.
Speaker 2:But that's an input-based strategy, limiting inputs and regulating the inputs. It's something that a big dinosaur of a nasty food company can adjust to if they have to or if they choose to, if there's money in it. What we're trying to do with our business is say, hey, look, people want this and they'll pay extra for it. This and they'll pay extra for it. Um, you know, adjust it to your market because it is inherently a? Um, a localized model. Like people care about food security. More than ever, people care about, uh, their, you know, their local environment, and I think so much of how global cap I don't want to sound, you know, but whatever it's true how much global capitalism has tried to address the problem of sustainability, uh, is, is these, these regulated financial commodity products that are soulless? Um, I mean, look at I'm sure on your podcast you've had plenty of people poop on carbon credits and, and I'll tell you why that happened because some guy at a hedge fund or some other, some financial product, made up a way thing that you need to be big enough to be bought, chopped up and sold.
Speaker 2:Tradable Big companies have to have a way to access it. Because you need people, you need the natural buyers to take it off your hands way to access it. Because you need people, you need the natural buyers to take it off your hands. Uh, and like you think about how much that's been bastardized from something we did not to I don't mean to whatever, I did it anyways, but common land helped us do, is, you know, plant trees in our supplier network, like, literally, just yeah, we're not gonna buy a credit. Uh, we're gonna plant trees, they're gonna be biodiverse, they're gonna be done with the intention to increase water, water, um, holding, and, and, in fields that were cut down with native trees, to bring back. You know, literally we're just going to try to make this land kind of what it used to be as most as we can, um, and anyways, I don't I have to remember why I'm on this rant, but um but I find that organic is really similar.
Speaker 2:I mean, talk to and I love organic, I eat it if I can't get my own food. But talk to an organic farmer or, better yet, someone who used to be organic, and they'll tell you that in 1986, there was a great premium for what they did. Maybe through the mid-90s. There was a great premium for what they did, maybe through the mid-90s, and then it got so commoditized that their premium went away, and the rules were written to keep large companies from bad behavior, and as a result of that, though, they were done in a way that became too expensive for the little guys to still be certified, and they weren't making any extra money, despite making the best food.
Speaker 2:Um, so I think I think region is like so uh different as a system versus this that, um, it really has a chance, um, and, whether you want it, whether it ends up being, you know, region, organic or some kind of there's some name I haven't no one's thought of yet that takes hold. Uh, we want to be there, and I think companies like us want to be there on the forefront. Um, because it just taps into something that you, that is really hard for the big companies to deal with. Uh, kind of in the same way. Kind of in the same way. You know, dvds in the mail were hard for blockbuster to figure out because it seemed crazy. It just literally seemed crazy and it got us Netflix at the end.
Speaker 1:Let's not forget how Netflix started for the younger people in our audience.
Speaker 2:Oh, yeah, that's right, just like DVDs in the mail. Yeah, dvd is a physical disc with a movie on it.
Speaker 1:It seems like a CD, you remember that, and it contained the full movie and you could choose languages and sometimes trailers and things and like background and where, like behind the scenes, et cetera, but it wasn't streamed so you didn't need an internet connection. Anyway, let's stop sounding like we're very old. Two final questions what would you do as an investor? If you would be an investor, you would be an investor. You're not running dirty clean food, but you had a billion to to put to work. What would you focus on? What would you prioritize if that was your? Your mission, let's say, could be really long term, but it had to be investments. Can you imagine how?
Speaker 2:dangerous. I would be uh with that rant, I just went on. And a billion dollars to back it up, that would be very interesting. That's why I'm asking.
Speaker 1:Actually, it's a perfect bridge. I didn't think about it, I was still in the DVD. Anyway, what would you focus on if it's kind of disruptive? Saying US dollars, it's slightly more than Aussie dollars.
Speaker 2:Oh, you mean even more money? Yes, no, that's okay. I grew up there, so I have a sense of it. I mean, you know, this is a question that you ask and I'll try not to sound like I'm. It's not really related to dirty clean food, because dirty clean food would not know what to do with a billion dollars. Who knows what we do, um, but, uh, the idea of this infrastructure imbalance um is really interesting to me. Um, you know, I, I and I think it's true. And if you look at um, just to make a nod about food for a second, if you, you, you mentioned, you know, tesla, I think, or electric cars, um, and I think you know, one of the one of the huge barriers was the infrastructure to let people wanted them. You know, whether you know, regardless of your opinion about tesla specifically, like people wanted them and made sense, uh, the drivers don't have this structure for silent, smooth I mean I've yet to meet someone apart from the infrastructure you're going to get there.
Speaker 1:But like that, didn't like driving and even the sound people, like it's fascinating, the most vocal people against electric cars and was like did you ever drive one?
Speaker 2:usually the answer, surprisingly, is no yeah, um, and as it comes in, like it's, it's making a huge difference. You know, I I have a family member who, um bought an electric car and I I was floored, uh, I would have never begged him to to do that. And uh, you know, I asked him, well, what about I mean that? And you know I asked him, well, what about I mean when you have to? You know, drive this far? You know it's okay now for him.
Speaker 2:So I was just thinking, you know, if you take that into the food area, this lack, and you know it's the same thing with alternative energies prior, like you know, there is a big spend required to get, you know, and usually it needs government regulation or government funding to support the building of infrastructure. For, you know, whether it's solar power or wind or any of these new ways to get away from fossil fuels, it's expensive. So what I would want to do with my billion dollars is say this whole, this whole rant that I just went on about inputs and um and synthetic uh production of food, I mean, I can see where capitalism is going, like, okay, so they'll just use more and more regulated uh ways to have a highly processed in product and maybe it'll be vegan and maybe it'll be not, who knows? You know, I would like to build infrastructure that supports local, local producers with a, with an aim of protecting and supporting uh small farms.
Speaker 2:Um, I, I really believe that, uh in the social. So a tangible example would be, uh, you know, an abattoir in the meat business Cause I've been talking about meat uh gosh, I hope you don't have too many people that hate meat on your podcast, but you know a lot of stuff is important to the holistic system, um, but you know, uh, an on-farm abattoir or a micro-abattoir that can help some of these small farmers in every geography.
Speaker 2:You know access to that to build a place to properly process, to do the killing and initial processing stages. It has access to export facilities if needed, or just access to it's good enough to sell to a grocery store. It's a huge. It's a huge way that people that the existing industry takes a big chunk of of a farmer's uh livelihood.
Speaker 2:I mean even this company that I run, uh, we just got access to the best abattoir. Uh, I mean just literally, you know, in the last six or seven months, to the best abattoir. I mean just literally, you know, in the last six or seven months, to the, to the, to an abattoir that was certified high enough and well good enough for us for me to access some of the better markets. So it's just everything's just sort of stacked against localized community, localized community approach. So my, my billion dollars would be to look at the infrastructure I don't know, 50, 50 places uh around the globe and and figure out what each one needed. It won't be the same in every market but you know, help a lot of this is present actually, yeah, transport processing it's like.
Speaker 1:It's like, yeah, it's a huge missing piece. We interviewed or emma chow did, uh, kyla rose oslander, they talked about this as well. They focus purely I mean we the interview of the conversation was around region mindset but their firm focused purely on processing and as the missing, non-sexy piece in the us yes, partly farmer owned, localized, because everything became two or three, seven hours drive, 10 hours drive, et cetera, et cetera, which in animals should never be done, but also in grain, et cetera just doesn't make any sense. So we actually co-invested with them in tree range farms on the chicken side we had Reggie on here as well and current spring mills on the milling side of things, the processing of grains and. But the opportunities there I'm not saying it's easy, but industrial, like smaller scale, still big, but um, focus of farmers nearby getting products like imagine the waste also because of this transport, not only the energy cost and, uh, the climate side of things and emissions, but just the waste, because stuff gets there too late or stuff gets there in a different state or gets there because it has to be dragged around everywhere.
Speaker 1:You're right, it's not sexy, but it's really important.
Speaker 2:I mean, that's one of the services we provide to our farmers basically is not that we have an abattoir, but that they are stuck with one option sometimes two depending on the animal and we can use our collective buying power to get access to another. And it helps them get a higher part. Because if you're the only, if there's one option in your two-hour radius, like they set the price and um, they can do whatever they want. Uh, within you know, there's some. At some point they'll get in trouble with regulators.
Speaker 2:But in general, like it's tough, it's tough to be a part of that system and it's it's rigged against um and which is, you know, I don't really want to complain about it from a political perspective, but like just the way that capitalism and scale and lower costs to feed the world works is that smaller guys have a hard time. And one of the one of the ways that a lot of people don't recognize is that it's not about their business smarts or their product quality or their marketing skill. It's not about their business smarts or their product quality or their marketing skill. It's about, like they cannot access um the same, the same tools to get to step one as everybody else and it's not.
Speaker 1:It's not a loving playing field, uh, level playing field and as a final question we were lucky.
Speaker 2:Now I'm curious what are you lucky about? Oh, yeah, well, we were lucky.
Speaker 1:Sorry, go ahead. We were lucky. Now I'm curious what are you lucky about?
Speaker 2:Oh yeah, well, we were lucky, you know. I mean I've talked about Wide Open a little bit and I mean I was lucky being a part of that because I would have run into the same problem, like that company was big enough that it could invest in the expansion phase of Dirty Clean Food, kind of from that. You know the whole way, obviously, because they um, you know where it's a great place to nurture, rebuilding the brand. But uh, also, you know that key part where you're sort of hitting the stride and you're going, you know one to three to seven to ten million real fast, um, that that eats up a lot of cash because of working capital, because of that, and you know you need new systems and tools and equipment to do that. And their buying power helped me get through that phase where I wasn't able to access, you know, some of these, some of these better facilities. So not everyone is lucky enough to have that situation. So you know I'm grateful for that and I try to use dirty clean food.
Speaker 2:We have a big warehouse. I'm sure I've talked to you about how I'm going to sublet it to save costs. But the other cool thing about it is we have huge refrigeration and freezer space in the best part of town for food delivery. So if I can have a little food hub and let other startups access that so they don't have to go get their own space and try to sort it out themselves, that creates a friendly situation that hopefully helps everyone out. It will also lower my rent, but it'll help them access something that they couldn't access without having to spend their whole seed funding on it. So I think Spending your whole whole seed funding on it. So I think Spending your whole equity seed funding on buying freezers is probably not the best thing to do.
Speaker 1:Yeah no one would do that.
Speaker 2:Hopefully they wouldn't do that, but yeah, it's just, it's so expensive, whatever your infrastructure is, that it's hard for startups little guys, however you want to call it, to get that, so that's what I've dumped my money on.
Speaker 1:And as a final one, to wrap this up, if you had a magic wand and you could change one thing overnight, what would that be?
Speaker 2:Wow, that's a cool question. Well, I mean, I'm just going to stick. Why change now? I'm just going to stick with where I am on this, why not? If I had a magic wand, I would wave it and I would say that is there any criteria? It's limited to agriculture, is that right?
Speaker 1:No, it could be anything, as long as it's only one One wish, no other.
Speaker 2:Okay, fair enough. Well, I had an agriculture one. I'll just go with it anyways, but that actually, no. If I could wave a magic wand, I would address wealth injustice in the world. The concentration of wealth is too much. So there'd be a bunch of people like me in the last question, whose family didn't have a billion dollars anymore, and a bunch of people who could afford basic food and clothing and a shelter. I'm sure you get that answer a lot, but is no, it's usually I mean mostly the problems in the world.
Speaker 1:We had so many answers there are different ones on legislation. Animals outside consciousness better taste um, but a flavor that people can taste immediately, which we do, um yeah, so many like the full spectrum.
Speaker 1:The full spectrum, let's say, of life, of world-changing ideas. We've seen um over the last, uh, over the last years, but I want to thank you so much for for the work you do, for coming on here and and sharing and going on this deep dive together, which is definitely on the deeper end, which I I really enjoyed super practical, philosophical good luck editing this definitely a lot of uh we don't, so that's fine if you made it until now, okay, right and um.
Speaker 1:So we definitely um. I. I really enjoyed this um journey from return of inspiration to uh, what are the exact drivers of margin in a direct-to-consumer business? And exploring what makes them work, and hopefully this served some people out there building these, thinking about this, applying to them, investing in them and all of the above. We need more of it. So take the lessons learned and let's go to work. Thank you so much, Jay.
Speaker 2:Thanks Ken. It's amazing what you do.
Speaker 1:Thank you what you do, Thank you. Thank you so much for listening all the way to the end. For the show notes and links we discussed in this episode, check out our website investinginregenerativeagriculturecom. Forward slash posts. If you liked this episode, why not share it with a friend or give us a rating on Apple Podcasts? That really helps. Thanks again and see you next time.
