Hello, and thank you for joining us.I am Melissa Travers, Director of Community here at BevNET and Notch, and I am pleased to welcome you to The Nombase Podcast.Don't forget to check out nombase.com, BevNET's platform built for the CPG community, where you can find episodes of this podcast and so much more.Today, we are talking all about operations, how to build systems that scale, stay flexible and support growth.We are joined by David McCormick, co-founder of Ayoh Foods, who has seen a wide range of ops setups across CPG throughout his very extensive career, and Jesse Barruch, co-founder of Whims Delights.Jesse will walk us through Whims structure from manufacturing in 3PLs to distribution and everything in between, and get some ideas on how to scale efficiently.It is so great to have you both here, David McCormick and Jesse Barruch.Thank you so much for joining us today on the Nombase Podcast.Yeah, we're excited to be here.Opportunity to talk about ops and scaling, you can sign me up.Excellent.Well, Jesse, let's start with you and Whims.For any folks out there who aren't familiar with Whims Delights, I feel very bad for them because it is an absolutely delicious product that is relatively guilt free.Can you tell us a little bit about Whims and your role?Of course, and thank you so much for having me here.I'm excited about this conversation.There is very few opportunities in life.I get to go deep and nerd out on ops.Getting to do this with David is super cool.Thank you.Pleasure.Whims is reimagining America's best-selling confectionary in a better for you format.We've drawn inspiration from the candy we all grew up eating and have redeveloped it using very classic confectionary techniques and modern ingredients.We've got four SKUs out in the market and are focused on wholesale retail distribution.David McCormick, thank you so much for joining us.As I mentioned in our introduction, you've had such an extensive career in consumer packaged goods.Tell us a little bit about where you've been.Thanks, Melissa.I feel very fortunate to have been on many different sides of CPG in my career.Firstly, on the retail side, I was Director of Grocery at Whole Foods Market, and I was with Whole Foods for almost a decade, so I learned a lot about the retail side of the business there.I've been on the brand side both in early stage and later stage businesses, helping them grow and scale operations and supply chain.I've also been fortunate to work on services companies where we take early stage companies, bring them to market, help them grow and scale.And then lastly, small stint on growth equity.And so having been on the retail side, the brand side, the services side, and even a little bit on the VC side helps kind of shape this worldview on how to build a lasting, scalable business.Probably gives me a little too much opinions on how to do it right and how to do it wrong.Well, you're exactly the person we want to nerd out with.And now you're at Ayoh Foods, which is a partnership with Molly Boz.Tell us a little bit about that.Yeah, Ayoh was born out of an obsession with sandwiches, first and foremost.I think my co-founder, Molly Boz, is an absolute culinary genius and had this realization one day that everybody loves sandwiches, but tends to make pretty utilitarian, boring ones at home and is pressed to really do it the right way.And so Ayoh is a mayo-based condiment that is focused on bold flavors, your favorite sandwiches, and how to really do them right at home.Well, in the same way that anyone in the audience would be missing out if they don't grab themselves a bag of whims, they should certainly go out and try Ayoh if they haven't already because truly they are so, so, so delicious, all of the skews.Well, excellent.That's a great way to set up our conversation.Jesse, let's dive in a little bit on Whims Delights current Ops setups.Can you just give us a full way of the land, doors, warehouses, 3PLs?I know you have a lot going on.Yeah, thank you.I think if we sat down in a room and asked ourselves the most complicated way to do it, we'd come up with the way we're doing it.So we're currently distributed in somewhere around 1200 doors through a network of DSD partnerships regionally.We just signed up with some broad line distribution with Kehi and UNFI.We still have a relatively sizable business of direct customers, so wholesale accounts who buy direct from us either on fare, email us orders, text us orders, so they're coming in from all different angles.Given that we've got a multiple product, we had to go with two, three PLs.So we're bi-coastal on our three PLs, so that we can be two day ground ship anywhere in the US for the summer shipping months.From a manufacturing perspective, we manufacture all of our components from scratch.So everything from our two types of chocolates, our peanut filling, our nougat, our caramel, our cookie, every component.What we found when we went to market with our concept was we tried to buy ingredients that were pre-made from ingredient manufacturers, but we found that they didn't live up to either our target nutrition panel or taste and experience.So there's no shortage of low sugar chocolates.We just found that they didn't meet a standard of taste and experience that we were looking to create.So we have a manufacturing partner who makes our chocolate and peanut filling.We then have two finished goods manufacturers.One makes three of our products.One makes the fourth product.And underpinning all that is a supply chain of raw materials that we are responsible for procuring, transporting, storing, reconciling inventory at the end of the month, managing those copackers, those outsource manufacturers to use those ingredients in an efficient manner to manufacture our goods.So, thinking through even a layer down is all of that has to live within a structure of a cost of goods that allows us to build a profitable business.So that means we're always hunting for new suppliers.Chocolate prices in the last two years have gone up 400%.So, dealing with creating efficiencies in that supply chain while absorbing input cost increases ranging from 5% to 400% along the way.You know, you sound so calm for somebody who has so much going on.That is a very textured landscape, if you will.And are you cold chain shipping because it's chocolate or how does that work?In the summer, we have to ship refrigerated, store refrigerated.You know, the final mile has to be in a controlled environment as well, which is why we've got the two, three PLs.So it limits direct to consumer business, whether it's on the Amazon platform, because as a meltable product, we can't be FBA between April and October.It limits our ability to really drive DTC sales through our.com or through things like TikTok shop.And as we're selling to retail customers in climates like Texas and Florida, we do get, you know, and even though we're shipping insulated, ice-packed and two-day shipments, we still get melted product.And how many SKUs again do you have at this point?So we have four finished goods recipes that are broken out into 11 different SKUs across, say, three channels.That is a lot.I'm sure that there are plenty of challenges, along with the wins and successes that you've been having.What are some of the challenges that you're experiencing at this point in the game?Yeah.So there's lots.I think the biggest challenge operationally is building systems that manage this supply, this value chain from everything that happens upstream, the procurement of packaging, raw materials.I think at its core, we're really in the business of taking cash, converting it into raw materials, converting those into finished goods, and converting those back into cash.And so I think it's our job to be as efficient as we can in that process.So building systems, I mean, we're on our fourth iteration of spreadsheets that manage this value chain from trying to work within confines of both capacities and constraints on the manufacturing side, to raw material purchasing, aligning our needs to things like pack size, MOQ levels, and doing so where we have a life cycle of component manufacturing that supports finished goods manufacturing, those two effectively happening in tandem in a way that everything shows up exactly when we need it and we're not holding and tying up cash unnecessarily in large advanced purchases of of those raw materials and sitting on inventory just impacting our cash conversion cycle.So I think our biggest challenge if I had to summarize it would be efficiently managing that supply chain.Everything that happens upstream and then everything that happens downstream.So that's probably a way to sort of summarize what we're dealing with.David, that's a lot.If you were working with David to try to maybe look for some efficiencies and help make his life a little bit easier, where would you start?I think it's really interesting kind of first of all because as founders, when we go to bring a product to market, we think more about what is the product, what are the attributes, what's the customer problem, where are we going to sell these things, and less so about this very nuanced, complex supply chain, value chain that Jesse described.I feel like what Jesse talked about in terms of procurement and planning and a lot of how things are done today, they're usually done in response to some sort of issue or something that's come up, right?It's like, oh, my product melts.We can't just ship from the center of the country.We need buy coastal.And then now you have to manage inventory in two nodes or my NFP isn't what I thought it was going to be.And so now I've got to go make it ourselves and also figure out how to get that made in time and land the ship.And so we kind of overindex as founders on like what the product is versus like the entire value chain and how we want it to fit together.And that's like what stands out first to me, which I think is really interesting is like, you know, a few years in every time you react to one of these kind of setbacks in the value chain, you've now either added more complexity to the system or more cost.And it becomes a little unwieldy, especially if you have multiple product at Ayo, we're an emulsified mayo based company.So same thing, you can't freeze, you can't melt.It makes it increasingly difficult to try to just land the product perfect for everybody.And would you explain NFP?Ah, NFP just being nutrition facts panel.So, and there's a lot that goes into an NFP that I think sometimes is missed.Both if you have components and you're doing analytical or, you know, lab results on your nutrition facts panel.But as founders who are trying to, you know, make sure product checks a lot of box for consumers, the nutrition facts panel obviously is a really important one as folks are paying closer attention to macros and what's going into their pantries.Especially for a product like Whims Delights, it's probably the second thing that consumers look at.Jesse, why don't I hand it over to you?Do you want to list out maybe one of the challenges that you're working on and David can kind of pick through it with you?Yeah, I think if I had to sort of hover over the thing in that value chain I described, it probably provides the biggest challenge.It's that inventory management piece in two ways.One is managing overlapping production cycles of components and finished goods, factoring in lead times ranging from two to ten weeks.And then getting that skew mix right downstream to having the right product in the warehouse at the right warehouse at the right time, all well growing, right?Like we're in a high growth phase from Q4 to Q1.We grew 59%.I think this quarter is not quite finished yet, but I think we'll grow at a similar rate.And so most of our new demand is unplanned.And so it's that system of sales forecasting, demand planning, and then that underpinning of two sort of concurrent supportive production cycles, all while managing a list of, I don't know, 50 raw materials.Maybe even just to frame it a little tighter is we're on our fourth iteration of spreadsheets attempting to do that.And as I've looked to market for systems to support this, I feel like the, you know, maybe from a complexity perspective, we fit into maybe a classic ERP, but from a size scale and cost perspective, that's relatively at a range.And then as I look at, you know, purpose built tools that are modular systems that would live within an ERP, like an inventory management system, I find that they are, you know, really big spreadsheets anyways, that require, you know, the upkeep, and then, you know, subsequent downloading, manipulating of data.And so I'd love to hear your thoughts if we were lucky enough to like, David, you're hired, you're head of ops, it's day one.This is the complexity that, you know, you're coming in.I'd love to hear you talk through, like, how would you think about blocking and tackling and planning and, you know, all of the different processes that go into, into supporting, managing our supply chain?I think that's the number one question, how to have inventory with such a complex supply chain.And I think it starts by actually trying to like map out really what the real lead times for conversion are.Because I feel like oftentimes we take what might be the best case scenario for lead times versus like our actualized real conversion times.And that always puts pressure on the system.So first and foremost, let's just map the value chain from Coco being to stand up pouch in a retailer, and really gets sharp on how long it takes to process each of these steps.And then maybe even implore if you test to really validate like, great, we think it's two weeks, but the last six have proved that it's four.And so it's twice as long than it's normally taking.And if you're not accounting for something being twice as long, you're not probably putting up the right amount of inventory, which is creating shorts and creating a lot more volatility downstream.But I would start by just simplifying.I think I would actually look to probably not implore a bunch of tools and a lot of sophistication.I feel like automation and sophistication comes later.I would try to get very manual processes in place that helped us really perform with a lot of accuracy and precision.And so because there's so many uncontrollables, I think the first thing we would have to think about is like, how do we de-risk the inventory and the supply chain?And then what matters most to us?Because I feel like we try to be all things as founders, we try to focus on on time and full, we try to manage inventory turns, we try to manage working capital, we try to manage margin.And I think that as a emerging brand, you can't focus on all of those things all at once, you'll implode by trying to be everything.What I hear is that there's going to be trade-offs that we're going to have to make.How would you prioritize?Now you're a founder, you're in that seat.And you've got this deep ops background.How would you, if I was asking, okay, David, how should I be thinking about the priority of that list you gave of inventory, cash, efficiency, all of those things?How would you rank those in order of most important?First and foremost, on time and full, which I know is hard when you have a lot of unplanned demand.But on time and full is really important because anytime you're late or anytime there's a short, your downstream distributors and partners are going to react to that, and they might order more next time or they might order more safety stock, which will then force you in planning to think that there's this demand signal and maybe build more inventory, which might result in code life issues or not moving enough inventory or tying up too much working capital.On time and full is such a very basic principle, but I think the more stable on time and full is in the business, the less craziness that happens throughout the entire supply chain.Then I think managing code life and quality is probably your next best important thing because if the product isn't perfect in that first experience with customers, then you're probably not going to get the repeat business.And so managing fresh inventory, managing code life, keeping product as high quality as possible is the next most important thing.And then from there, I think you can start to work on, as an emerging company, inventory terms, working capital.And that's hard because I think that it's actually the inverse of what I think you would think as someone operating a tight balance sheet, as an emerging company, you don't really have a lot of stability to be able to put a lot of capital to work to do that.But it's a little counterintuitive, but I think it's the right way to go about it.But I think there are unique strategies that you can implore, whether they're floor stock programs or contracts with suppliers and other things that can help, you know, take the pressure off the balance sheet and also allow you to kind of have the inventory when you need it.Something that occurs to me that I've never thought of with what you said is your distribution partners will react.And that will trigger a false signal back to us about the true demand.And then that may throw us off further.So that's an interesting unintended consequence of not being in stock and being able to deliver in full.The piece that maybe you could spend a bit of time sharing about is, okay, so that managing the balance sheet and cash conversion cycle, that's a real issue that there is just...You talk about some of the creativity, but can you talk a bit more about...I think I'm in a position like most emerging brand founders in the access to capital today.I would say that the bar for accessing capital over the last three years as I've been in conversations with funds from day one, it used to be come back when you've got a million in revenue.That number is now 235 depending on the fund.I don't envy funds, either earlier funds or earlier components of these funds have been deployed in a very different market with very different economics at play.So that access to capital for us, emergent brands sub 5 million is very tough to access both debt and equity.So then it does make that balance sheet issue and your working capital issue a real issue with fewer and fewer solutions too.So yes, going and asking for terms from our vendors.But what are the other ways in which we can deal with the reality of the working capital?It also comes back to that earlier point I was making around best case scenario versus worst case scenario.And so when you're working with distributor partners and you're dealing with slotting and a lot of new fee structures, whether that's delivery fees, lumber fees, all of the deductions that come with the business, I think that we often look at our receivables, our AR line and think, okay, it's X number and we're going to see that come in in the next perfect 30 days.And that's like, again, back to like perfect case scenarios.What at Ayoh we like to think about is like hedging against that number a little bit.Like what are the really pennies on the dollar that we might see from new distribution on that cash conversion cycle that you alluded to, planning for deductions.And then I think thinking about our margins and our channel strategy as a means of floating that.So, you know, at Ayoh, you know, D2C is not really there to help us like deliver mayonnaise to people's doorsteps.That's not a problem people really have.But D2C for folks who want to shop online provides efficient working capital for us to float and support inventory builds and do other things that we might need to do to support the retail side of the business.So I think you can think about kind of like your different channel strategies and how one can support the other in terms of, you know, self-financed growth.And then I think we have to be sober around contribution margins and variable cost and understand like how much can we actually afford to grow.You've mentioned like really impressive quarter on quarter growth rates.There's a breaking point to that though, too, that like, you know, whether, you know, cash coming into the business and the margin and contribution margin to support operating expenses, you can only afford, it's finite.There's only so much growth the business can afford before it breaks.And I think that capital is tough.It's always a tough capital market.And, you know, being a VC is challenging.It's, you know, as you alluded to, there's an entire business model there and it's, you know, a long game in food and beverage CPG.And so waiting too long to cover your cash needs is like where it usually hurts the most because you become the most desperate for capital at that point to continue staying ahead.So it really hedges on what's the most conservative look I have on the business for cash.And then what can we actually afford and how much can we actually afford to grow this business?And then there's my on paper cash runway, but then there's this like Jesse belief of cash runway.And you're always staying a few months, if not six ahead of that for your capital raising.Because I think ultimately, what we're dealing with is a wide range of business models that have to all fit together.Like if you think about your suppliers, you think about lines of capital, bankers, VCs, distributors, all operating with different margin structures and different needs.It's like trying to marry each of those pieces up is more an art than a science.And I think you got to think about your supply chain and your value chain in terms of de-risking.What's the most risky?Because if you can kind of start to eliminate that, then it like the working capital starts to work for you.So, you know, if you can get couches printed in 14 days digitally, but you have to trade off color, that might be a good move until you can afford to do offset printing and have perfect color and, you know, need to buy, you know, 500,000 impressions each run.Yeah, there's a lot there to react to.And that, I think that's the interesting tension.Probably the piece that lands most for me there is that how expensive growth is and that dichotomy is an entrepreneur wanting so badly and desperately to grow.And the realities of driving growth in a supply chain driven business that ultimately the reward for more business is more cash at the door for more products to fulfill on that business.And so, and also channel mix.I love the idea of thinking about, you know, contribution margin by channel.So having high contribution margin channels that do support some of the lower contribution margin channels, like maybe broad line distribution.And I'm curious, David, on the note of that you made early on there about, you know, deductions and charge backs.How do you think about, you know, holistically from all of your experience, a good placeholder for, okay, so, you know, if you're selling into a retailer through a broad line distributor, expecting charge backs on top of your trade spend and all your other retail execution costs, how would you think about a good, safe, conservative placeholder to plug in there for that channel?I think in high growth phases of the business, it's probably like 60 cents on the dollar, which is very scary when you start to do that math.I think when the business is a little bit more stable and mature, maybe north of 15 or 20 million annually, that becomes a little less aggressive and maybe is more like 70 cents, 80 cents on the dollar.But there are just so many surprises on the deduction side that we will factor based on that.Anything that comes in ahead of it is all upside for us, but we're doing that downside planning most of all at Ayoh, and that helps us avoid the surprises.What changes in those two camps?What changes from when you're high growth and let's say, recovering 60 cents on the dollar versus a little more stable north of that marker you mentioned, capturing another 10 or even 20 points.What changes in those two scenarios?Concentration of new business versus recurring revenue is most of it.New distribution is expensive due to slotting, promotions, just standing up new DCs and new distributors that may have program fees that are new to the business.But as soon as you get more reoccurring revenue in the business, that's more stable, right?You've paid for slotting and your promos are more stable.They're not so front-loaded to kind of establish the brand.It starts to, I guess, net itself out in a weighted way that you can start to plan on more of those doors, more of those points of distribution, helping recover cash for the business.When you talk about that 60 cents on the dollar, is that inclusive of trade?That's inclusive of trade.Got you.If you had to take trade out, which is it fair to place hold 20, 25% for trade?I again, downside, 25.Even if you thought 20, give yourself a buffer.You know, like that's good.If the budget's 20, give yourself a little buffer just to be on the safe side.But yes, I think trade being, I think trade can be kind of a little bit of a broad term, but how I would define that would be anything promotional, any kind of deductions for, you know, fees or slotting and payment terms, which all add up, right?2% to 10, that 30 payment terms is already 2%, 10% of your original 20.So it goes, it adds up very quick, but that's why I think I hedge on that 25, because there's a lot that hits that contra revenue line.You're talking about 30% in addition, 30 to 35% in addition to trade spend as deductions that you'll plan for in the early days and that bucket is filled with all of the fees associated with new business.So, launching a new DC, all those fees, the first time buy from a retailer that gets discounted.So you'll hit 30, 35% in additional deductions just based on that new business.That I would bucket in my 20 to 25.I think the extra fees are some of the unknowns, like shelf maintenance, reset fees.At retailer spoilage, any damages that the retailer books back through the distributor.So there's just an endless amount of missed doc appointment fees.There's just all of these ways to be nickel and dimed.It hurts as a business operator to have to pay those fees, but it also hurts distributor partners if folks are always late for their appointment.So it's kind of a checks and balances kind of situation, but it's really those uncontrollable costs that are deductions that come back, that really the ones that burn you most are the ones that were hedging above trade spend.So in trade spend, that 20 to 25, I would be thinking about budgeting for slotting and free fill and things of that nature.Got it, super helpful.David, can we go back for a sec on...I appreciate this isn't a necessarily a function that resides directly within ops, but sales forecasting in a founder led business, it's funny because when I talk about sales forecasting, the answer I often get is, well, your sales team, and then I look around the room and it's just me.Given that it's an inextricable connection between sales, ops and finance at our stage, the three are so linked, it's impossible to truly pull them apart.Given that your supply chain truly starts from that sales forecast, which feeds demand and production and everything that then happens and in a high growth moment, like how would you think about or how should I think about that sales forecasting with so much pipeline, new business, base business, different channels?For us, given that connection between sales and ops, and given that we're doing everything, we have help with ops and external partners for sales.But at the end of the day, we're responsible for that sales forecast.So how should I think about sales forecasting at a high growth moment where particularly, I don't know if this has been your experience, but mine is it's often like, wait, wait, wait, hurry up.Yeah.And the risk of producing against a verbal commitment without a PO in hand, and often the time it takes from a verbal yes to an actual PO.How do I think through sales forecasting, which is ultimately like step one on our supply chain?I think you hit on something that's really important, which is when launching new business, you can be told it's happening in June and that can slip to July.And if you had to make that product in May and buy it in April or March, and you're sitting here in June, it's really tough to have done the last eight to 12 weeks differently, and also now somehow magically have the product in hand.And I think that, again, just thinking about the value chain and the supply chain, what is the hardest, most complex, longest lead time areas of the business?How can you de-risk those?Whether that's putting working capital to work, to put up cocoa, or put up some input that is really specific to your manufacturing.Thinking about really unique situations, maybe there's, in my past experience, we had short shelf lives.But if we froze things, we could shorten that, we could lengthen that time in terms of code.And so sometimes you may want to implore those types of strategies where it's like, I'm going to buy cocoa and we're going to freeze it.I don't think that's a good idea, but for sake of argument, you kind of get where I'm going with that.But zooming out real quick on this, I think as founders, we're always trying to do things like the most efficient way possible, and we'd love to just do it once.We'd like to just have the one template we use for forecasting, jump in there, dump in the information, and get the information out.And I don't think we can operate in a deterministic way with forecasting.I don't think you'll ever get it exactly to the bag on what you need.And instead, I like to do kind of multiple layers of forecasting so that we can compare and contrast them to actual shipments.And so it becomes more statistical in that way that you're like, I might build a bottoms up forecast from a sales perspective.What are my points of distribution?What are the velocity assumptions by SKU and by retailer and understand rolled up what that looks like at shelf consumption?And then I might think about what are the goals of the business?Like what do we need to hit in terms of revenues?What's that forecast need to be from a production point of view?And then how does that kind of foot to our actual shipments?And so what happens even when you have a sales organization is they might be looking at syndicated data that happened 26 weeks ago to inform a velocity assumption for consumption at the shelf.But consumption at the shelf usually in CPG, food and beverage, shipped into a distributor eight, 10 weeks before that.So that how you can kind of do each note of the business's forecast and then how you can kind of compare them and come together with a production and resource plan is the way to do that.And it's labor intensive.I mean, that's not just doing it once, that's doing it like three or four different times, which we're most short on, is time to do those sorts of things.Yeah.So what I hear is it's a process, not an event.Yes, it's endless, 100 percent.But I think it's like you're trying to think about it from a multitude of different directions.How much do we need to hit our plan?How much does the sales team think will actually sell at retail?Then what's the supply chain need in terms of managing lead times?If you can pull those three different views together, that's like the CMYK.Now you can get every color of your supply chain put together.One thing that comes up for me in that, as you mentioned, that variability between load-in, in-distributor hits the shelf and turns, that ultimately gets fed back through syndicated data, is from a planning perspective, how do I think about new business?How do I think about taking an opening PO that is generated out of some window of planned demand, and roll that forward into a forecast to inform production?This is super nerdy.I'd be surprised if Melissa even lets us get this into the podcast.I'm all in.My ears are, they are peaked.I think if you can delineate between base volume and incremental volume as like the first standard of your forecasting and how you're managing and thinking about the business, it will go a really long way.Because what you talk about in terms of pipe fill isn't necessarily an indicator of like future demand.It also becomes really good to know when you need to lap pipe fill next year.So when you talk about this quarter on quarter growth, how much of that growth is pipe flow?Because if that pipe fill isn't here next year, you may not lap that growth and you might have flat periods or even maybe down periods if you went through high growth pipe fill moments.So understanding base volumes, understanding pipe fill and understanding how to look at them differently in the demand planning process at Whims, will go really far in helping bring a lot of accuracy to the plan.But it will also help inform looking outwards, what you need to do from a sales organization to continue to lap.Same with promos.If you're running promos, that's incremental volume, that's not base volume.If you're comparing those two numbers, you can understand what promo events were really efficient.Should we do this promo again?Did we actually grow the base or not?That again, just takes a lot of the volatility out of the system, understanding, hey, this is our base volume across the entire system.This is what we have to make every single day, because this is the base.Then as the base grows, that production can match.Then you're looking for these incrementality events, and you're planning and pooling those back through.Oh, I have new distribution coming on.We landed a new retailer.We did a big promotion off shelf.That way, you can find that signal in the noise and understand how to plan through it when you lap it in the future.David, if we haven't lost listeners yet with the level of nerdiness, I'm going to try to do that one more time.When you talk about that tight fill and lapping it, if you were my Ops guy and we were shoulder to shoulder, taking on new business, getting these initial POs which are in fact, PipeFill and bringing distinction into our forecast between that PipeFill before it becomes base business at some point in time, right?How do I think about actually doing that?What are the mechanics involved of acknowledging that this is PipeFill for a certain window of pull through from the distributor to then receiving that second PO, which now becomes replenishment?What are the mechanics involved in how I think through that?Yeah, I think you got to kind of create some basic rules or work with your retail partners to understand how they operate.And so one example of this is like as a finger in the air, I would always assume that a case and a half or two cases per store is pretty standard for establishing new distribution.So if you know that you're bringing on a store chain that has 500 doors, you can assume that you're going to need 1,000 cases just for pipe fill.And anything in between or above or below that helps you on the operation side flag any potential issues.Let's say there's just one case.Well, then there's not enough volume in the DCs to support additional pull through.If it's more than that, something is often arrived.But if you have those standards, I think you can start to find the difference between a PO for new distribution that's 1,500 cases, 1,000 cases or 750 cases.And then I think working with the sales team in terms of talking about trade promotion management, new distribution and understanding from them on their forecast.Okay, we want new business.What is your assumption around pipe fill?What is your assumption for promo lift?And you can start to map those things out.And like we talked about earlier, pulling them back from consumption at the shelf.And I think having a really basic authorized products list that can help you kind of track purchase orders and new distribution and kind of create a little bit of a storyline that you can refer back to in the future is also key, right?So we want new retailer, we ship this many cases, and you can refer back to that with appropriate dates and things for how to lab it next year.There's complex tools out there.There's trade promotion management tools, there's forecasting tools, there's a lot that you could invest time and energy into also.And I would say that at Ayoh, we were seven months old, we have an ERP, but we have a forecasting tool.And it's mostly because I just don't want to have to get to a certain level of the business and go try to historically restate a bunch of information.But also, it's possible to do because we've thought through the controls and business processes in the system to make them work.And so if you don't have a process for forecasting, if you haven't thought through the complete order to cash process, implementing an ERP will be a problem because the ERPs are only as good as the information you give them.And what I find is, many times we are seeking automation, we're seeking speed and an efficiency in the tool, but we haven't actually thought through the business processes yet.And that's like the shortcomings I've seen in terms of implementing ERPs on my own and having big mistakes, and also working to help other companies fix their ERPs because they just wanted the solution.They didn't have necessarily the nuts and bolts that actually make the solution work.I'm going to need a template, David.I need you to send me a template.There's no template.That's the craziest part, right?Like you have to decide for your business, like how are you going to place a PO?What are you going to do if there's a variance?Are you going to adjust the PO and then like do a three-way match to a PO receipt and an invoice?Are you going to receive the PO with a difference and track that?If you haven't thought through all of that nuance, you're not ready for an ERP.But if you've thought through the nuance and how you manage bills and how you manage purchase orders and production and sales orders and all of that nuance, then implementing an ERP becomes pretty, pretty quick, depending on which solution you choose.What if I just want to have a fun brand and sell product?I know.That's what we all came out here to do.I just want to sell product.I think it's incredible.And I like to take friends and family to the grocery store and just like have conversations about this, because everything you see on the shelf is an absolute miracle.When you think about all that goes into growing the inputs, harvesting, converting, turning that into caramel cookie bars, and then finally getting it to the shelf, it's really impressive how complex that supply chain value chain is.And it's missed on most of us when we go to the grocery store.Jesse, you asked such terrific questions, and I know you were joking about nerding out, but I think that the specificity of the questions that you're asking will really help the folks in our audience.I just have one last question for David as we close out the conversation.And then Jesse, I'd like to hear from you what you think your next steps are going to be.But before that, David, you mentioned that having a North Star as a brand can really impact the way that you run operations and help you make decisions.What do you mean by that?It goes back to just if you try to be all things, you'll be nothing, essentially.But I think knowing what matters to the organization and how to build your business around that is one of the first things we should be thinking about.For Ayoh, we care most about being where our customers want to shop.That's our North Star.We know that customers don't just shop in a grocery store, they don't just shop on Amazon.They do this combination of both.If we knew that going in, be where our customers want to shop, we knew we had to think it through FBA, and we had to think through Amazon, and we had to think through grocery, and we had to make sure the business could follow suit to that.That's what helps define that North Star for the business, because it allows you to check in on it as a litmus test of, should we do this or not?I think oftentimes as founders, we want to say yes to most things, we're chasing growth and we want to be all things.The hardest thing to do is say no to certain things and know where to focus, and then North Star gives you permission to say no, which I think is the hardest part of running a CPG.That sounds like such a smart way to frame things and to help you understand what your next step should be.And speaking of next steps, Jesse, that was a lot of information.Any thoughts on what you might do next?That's a tough question.Digest, I mean, you know, a ton of nuance, I think that, you know, one of my favorite expressions that I learned halfway through my journey is that first time founders think about product, second time founders think about distribution.And so I carry that with me.And I think that truly the conversation here today is really all in support of distribution.Like that's the business we're in.I think having a product that fits a customer need is sort of table stakes.And then figuring out your value chain and route to customer is truly the business.And so, yeah, I feel comforted in the fact that this isn't something we just figure out, fix, and then never think about again, that this is a process and a journey to continuously learn, implement, learn some more, implement again.And so, like, I really get that that's the business we're in.And probably the thing that I spend the most time talking with founders who are a little earlier stage than us is like, you know, everybody's always excited about their product, but this is the business.So, yeah, I mean, I love that I have a new friend who I can call at all hours of the night.Thank you for that offer, David, to solve all of our operational problems.And, yeah, I'm excited to, you know, look back through everything with this sort of fresh perspective and explore, you know, how can we think differently about what we're doing in our in our ops?Well, Jesse Barruch, co-founder of Whims Delights, and David McCormick, co-founder of Ayoh Foods.Thank you so much for being so generous and transparent with your questions and your answers.I so appreciated having you both on the Nombase Podcast.For everybody else out there in the audience, thank you for joining us.Make sure you go to nombase.com and we'll see you next time.Thank you so much.Thanks Melissa.That concludes another episode of the Nombase Podcast.Many thanks to Nate Brescia, our recording engineer, Ryan Galangue, our live stream coordinator, and Josh Pratt, our podcast editor.If you enjoyed the show, please leave us a review and follow us on your listening platform of choice.Want to be 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