In this episode we’re chatting with Kailey from Sacred Serve and there’s some serious hustle in this story!
Her first 2 years were spent doing hundreds of local events and making the product herself....
We hear her tactical tips when it comes to labelling and also chat about why it’s important to talk about your exit strategy - especially as women.
Sacred Serve is a plant-powered line of gelato bringing function into the frozen aisle. Made from a base of certified organic young Thai coconut meat combined with potent superfoods, adaptogenic herbs, medicinal mushrooms and just a hint of low-glycemic coconut sugar, this gelato is rich, creamy, and packed with plant-based nutrition.
Please note, this transcript has been copy pasted without the lovely touch of a human editor. Please expect some typos!
So I am Kailey Donewald Wall, the founder and CEO of Sacred Serve and what we make is this plant based line of gelato that was designed to bring more function into the frozen indulgent category. So really what that means is we use all ingredients that are chosen first and foremost for their health promoting properties. So we really bring, is this premium level indulgence alongside really powerful plant based nutrition. Oh my God, I'm so excited for this stuff to be on the market and to be you know, exciting options that don't taste weird, right? Get some weird one, Where does your entrepreneurial story start? I know that you launched the brand circa 2016 but going back kind of before then, what was the lead up to you thinking that you were going to start your own business and leading you to this moment? Yeah, it was really the catalyst was a healing journey that I had through food back in 2013 and the story is that really, I grew up suffering pretty severe cases of both asthma and allergies and so every doctor and specialist and they all told me this is how I was born and I would need to rely on medicine for the rest of my life, but then When I was 25 years old, I was actually living in Bali Indonesia and I embarked on a two week raw food clinton, so just fresh fruits and vegetables and within that short amount of time, my body completely healed itself of both asthma and allergies.
00:05:04 And really motivated me to, I quit my job, go back to school for nutrition and ultimately target the root cause of this issue, which is just the food being offered to consumers, wow. And so what led you to like specifically this versus, you know, um I don't know what another option is up ahead, but like vegan protein balls, totally things like that. Yeah, and you know, it's ice cream. So it's kind of a funny thing to be talking about wellness specifically in this category. So often times people are confused if you were so into nutrition, why are you making an ice cream product? Um, but ultimately it was while I was living in bali that I discovered this ingredient that we use as our base for all flavors, which is young coconut meat. And so that's really just coming from the same green coconuts that give you coconut water and if you scrape the inside of those shelves, you get this little coconut pulp. And so kind of seeing what what chefs were doing in bali, they were spiral izing it into noodles and using it as this, you know, meat and dairy substitute really across the board that it got my mind thinking about that.
00:06:09 And one of my friends who also lived in bali is a raw food chef. And so he had started working with some ice cream recipes And so we ultimately got together and felt like, you know, pairing that with my background of having a dairy sensitivity and these ice cream recipes would be a really good start. Yeah. Oh my gosh, I love it. That's so cool. What flavors did you launch with? What was the early kind of version one sacred serve? Well, I think like most ice cream companies, we tried to start with a vanilla and what ended up happening was that is now our salted caramel flavor because we work with coconut sugar and that's kind of like a brown sugar if you will. So it's got more of a car millie type taste to it. And so when we went for this vanilla, it was a very basic, you know, flavor profile. Um, it ended up coming out tasting like caramel. So we just added a little extra salt and called it salted caramel and it's now our most popular flavor. Yeah, that's my most favorite flavor of ice cream across the board. Always. So that's really cool.
00:07:11 I want to get into kind of the money piece of the puzzle and understanding what it took in the beginning to get this brand off the ground and what those early steps were to kind of paint the picture of building of building this and bring it to life. Yeah, I love this question and I will say that I bootstrapped this to a degree that most people wouldn't, but I remember being very naive and I started and I thought you know I will invest $5,000 of my hard earned money into this business and that that will be it. I'll just see how far I can really push this. And I spent $5,000 on a soft serve machine coming in from China and I was like this is just gonna be it And then that machine didn't work. So I had to sell that. And I think ultimately after that I realized I would need to give it a little bit more gas. So I invested 30,000 of my own savings and then about a year later my parents put in, they match that. So between my brother and my parents they put in another 30 And then an entire year after that.
00:08:13 Or maybe almost two years after that I did a very small friends and family round of 60,000 again. So at this point in time this is 2019 I launched the business or I started working on the business in 2016. Um I had gone 2016-2019 on About 120,000 in total. And what did that get you to in terms of, what did it look like at the end of the two-year period or three-year period? With 120,000. Were you thriving DDC store, was it retail expansion or was it you know something else? Yeah. so it was heavy retail. So being a frozen product, we really haven't built out our D two C channel. So what, that was in 2019. So I had been in about 50 kind of independence throughout Chicago and selling their, um, but ultimately realized I was kind of a solo Founder and didn't have a team. And so that was very challenging to service all these 50 independent stores. And I recognized that it would be more advantageous for me to streamline all of my resources into one larger chain.
00:09:20 That would be like dealing with one customer at a time. Um so I kind of pulled out of all those stores, did a rebrand on our packaging and then launched into whole foods About 20 whole foods locations in May of 2019, Which was kind of like a real launch into the market. You know, those early years were testing and iterating. Um and a lot of learning and then, yeah, 2019 with a little bit of capital, we bought a delivery van and launched into whole foods and and ran those for about a year. Yeah, wow, what do you think interested? Whole foods to your brand and why do you think it was like, what was the magic that got you stopped into whole foods? Yeah. You know, I've had conversations with the regional buyer and we've been very fortunate. So this past year we actually won the whole food supplier of the year award, which is nice because they only choose one product just across all categories for the entire region. And with that I got to have more intimate conversation with our buyer about what is it about this product that is so special.
00:10:21 Um and they really said it was a combination of things. So it's the innovation, it's unlike anything that they've seen yet in the marketplace. Um really one of the first to be working with true functional ingredients in this category. It's also our commitment to sustainability. So we're the first kind of at least nationwide, but potentially globally to launch a fully sustainable ice cream carton. So currently no ice cream pints on the market are recyclable. They look like they're just paperboard, but there's a little plastic lining on the inside that renders them trash. Yeah, it's a huge problem. And one that I didn't know until I started the company, but we have just kind of solved that. So we have just launched a fully recyclable, compostable and biodegradable carton. So obviously whole foods loves that initiative. And then the third piece is that they just have seen us really, really support the product on shelf, whether it's through demos, merchandising temporary price reductions in sales. They just feel like our team commitment is very, very high and that makes for a really strong brand.
00:11:23 That's really interesting and four points. 1 and two. These kind of like unique points of difference or unique selling points that you had. Was that a case of you just organically that's the two points that came about. Or you were strategically trying to find things that weren't on the shelf in whole foods already that you could make as your unique selling points. Yeah, that's a really good question. I would say, I think founders look at it two ways. One person is just looking at the market and trying to find a gap and the other person is starting with this really like mission driven, something that they solve for themselves. And I would say I'm the ladder where I really was solving something for myself, a problem that I saw on the market but you know, I have a business background. So I think it's also would be hard for me to say that that didn't sway into some of these decisions as well. Just recognizing like, wow, we can really lean in on this and you know, if we're the first to launch this will get a lot more, you know, eyes on our brand and if we're second or third, so can we really speed up that timeline and really push on that definitely Yeah, factors into the decisions as well.
00:12:31 Mm that's really interesting. And I want to talk more about the packaging and the cotton aspect of it. But I jumped a little bit ahead of what I wanted to start with. I want to go back to the early days of how you started to get momentum and people being excited about your brand and those kind of early customers, I imagine for a product like this, it's heavily reliant on sampling and you know, demos like you said, but can you talk a little bit about that early piece of, you know, getting the wheels turning and getting people excited about it. Yeah. So I really did everything organically again. You see people launched with $1 million 30, 40 stores early on, so demoing wasn't a huge thing. So for us, I was targeting all the vegan specific events and I found that the vegan community really, really embraces new products, especially ones that are good for animals and good for the planet.
00:13:35 And so that community became, no question are real big supporters early on. And so we really did. You know, I personally did over 200 consumer facing events in those 1st 2.5 years and got a ton of feedback And it was extremely helpful and I was able to meet a bunch of people. And so even today we have, you know, customers writing in saying, I remember those early events that you did, I've been with you throughout this whole journey. Um, and I think it really strengthens the brand in that way, but you know, an event is anywhere from $20 to $600 for a table. And so it just kind of depends on how big the event is, but that was something that we could afford to do and you know, do run it ourselves. So we're not paying anyone to do that and just getting a lot of great learnings. How did you actually find 200 events is a lot to do over over two years. So it's actually so much when you think about it. Gosh, that's incredible. How did you find all of these events and what kind of streamlined that process for you once you got into a bit of a groove.
00:14:40 Yeah, so there were a couple events here in Chicago that were ongoing, like every week it was, you know, a market and so between farmers markets, those vegan, you know, there was like a vegan mania and uh I'll forget all the names, but there were seriously so many events and so many of them were recurring every week, that you just kind of had to sign up once and then you have all of those slots and then again you also have customers that know where to find you, they know week after week that you're going to be at this one place. Um So yeah, those were really helpful to get plugged into and what kind of like learnings did you get from that direct customer feedback? I feel that maybe that led to Also you thinking about your packaging choices and things like that when you had these face to face interactions. But was there anything you didn't expect or anything that you realize you've gotten wrong during that time? Yeah. You know, I think pricing is something that we did a lot of testing and certainly markets are a little unique because I think you can charge slightly higher because people are kind of captivated and there but we definitely were reworking pricing all the time as well as our pack size and then flavors.
00:15:47 So we would really both ask people what their feedback was. Um But also what new flavors they'd like to see to really understand what people are looking for. Um And then we would just ask random questions like do you know what this ingredient is? You know what this does for your body to really understand how deep of marketing education do we need to be pushing for a product like this first? How much do consumers understand and things like does the vegan community understand certain things more than a more, you know then a person that shops at whole foods or a person that shops at jewel, You know what are the differences here? And how do we need to be kind of categorizing these different sub segments of customers to be speaking to them properly. Mm Yeah, it's so interesting. the customer research piece to be able to drive forward your product innovation and your decisions around, you know, pricing and things like that. When you, when you were going down that pricing route, what was the learning there? Were you priced, you know correctly or did you have to go back and change? Thinking back, we looking at our pack size, which is a 10 ounce, which is slightly smaller than a pint.
00:16:51 Um we launched at an srp of 8 99 which is 89 cents an ounce. And the most expensive brand at that time was about 75 cents an ounce. So we were very, very high and you know, I guess it's a long story, but I ended up getting some cost savings on some of our ingredients. So I was able to drop that price down. But ultimately we really haven't seen much of a difference between 8 99 and our new srp. So I'm starting to just question at this stage in our business how much price elasticity really is there on a product like this? And, you know, my advice to others is that while I certainly don't want to make the product non accessible, I think early brands have to kind of start with that pricing to really get themselves going and really just rely on those early adopters. So then hopefully bring the price down in the future. But I think it's really important to protect those margins early on and so I guess my overall learning was we could be higher and I think consumers will really pay for that when they understand and see the quality there. Yeah, absolutely.
00:17:54 You said that you had bootstrapped it to the point where you had your parents and your brother invest and then you did a small friends and family around, have you had to raise since then and why I'm asking is to understand for you when it comes to thinking about pricing and profit margins and things like that. If you were bootstrapping it obviously entirely through the journey, obviously you would need to be very, very clear on your margins to be able to support future growth and things like that. Whereas potentially it would change if you were then switching to getting some institutional funding and focusing on growth without necessarily that profit margin, which direction are you focused on and what are your insights from that? Yeah, so I guess, you know, starting this business, it always has been a goal to sell the company. I think that's something also women don't talk about enough is that I am in this to make a lot of money for myself for working so hard. Um it is a great product and I wanted to go far, I love that, but yeah, sometimes I think women feel bad like, oh I have, I just only started this because of the mission.
00:19:01 It's like of course it's for the mission, it's it's everything that I believe in, but also who works this hard for no reason. Um So yeah, so I think, you know, that has been a goal and I do have a business background and this is my first company. So in the early years I was really trying to understand the landscape and how a company does really scale and how quick that needs to happen. So I really took my time and just made sure that before I took any capital at all, I was aware of what I was doing with that. So I feel very fortunate that I've become very capital efficient. But um yeah, so most recently in 2020 and just early this year I closed a seed round of just under $1 million. And so that's going to really help us and so our margins are very strong. Um so we are always focused on profitability and and getting to that point inflection point in our business, but also it's with the growth mindset and so what I have learned is food is very, very capital intensive and on top of that we have a frozen product which just makes the supply chain even that much more expensive and it makes the shelf space that much more competitive.
00:20:09 So it really does take capital to really get yourself to scale to a level that you want to be making those revenues to be attractive for an acquisition. Um, so that's ultimately the route that I ended up taking and you know, it's been a positive experience. It's been the most challenging thing I've ever done is raising that seed round, but we have just a huge group of investors now that, that's really supportive and I think that that feels really nice, especially coming from that solo founder position with a very small team. It feels nice to kind of have that network, opened up 100% people to bounce off people to get, you know, different opinions on different perspectives for sure. Something that, I mean, I'm so early on in the journey in comparison to someone like you, but something that I've already started doing is having conversations with people in the m and a space to understand at what stage they look to acquire businesses or at what stage they become sexy in terms of, you know, are you looking to get acquired under 10 million or 10 to 20 million or do you have to go all the way to 100 million and you don't want to get to that point, say in between and then realize like, oh shit, and now I'm not attractive.
00:21:17 Did you do any of that kind of research in the beginning and for your industry? What's the kind of level phase that a brand like yours would be acquired? Yeah. You know, I really truthfully didn't do this very early on. I think I just thought sky's the limit and just went for that, but I think it is very, very helpful to have a concrete, I mean I had an advisor tell me you need to have a number in your head that you want to walk away from this business with and if you don't have that very specific number, you're, you're not going to get there. And so I was like, that is so clarifying your right. But yeah, so I see for our business three different types of exits it can either, you know, early stage, it can be a co packer can acquire you and so we're seeing a lot of that now in the space, which is really interesting and I think I actually don't know I'm talking, so this is a total guess, but my understanding is co packer could acquire you if you're making anywhere from 5 to 10 million and then the next layer up would be a private equity group and then after that would be a strategic. And so again, I'm not sure what type of revenue is a private equity or strategic would be needing, but certainly, you know, starting at 30 million plus.
00:22:22 So um, yeah, you know, a couple different routes and I think it depends how long you want to run it or how hard you want to push to get those revenues up for sure. But it's nice that there's a couple options and it's not, you know, your only option isn't 100 million sell the unit lover, like that's how it has to be totally, I think it's so interesting. I'm learning a lot, even speaking to people who are in more of, I was talking to someone from distilled ventures which they are kind of like the halfway point between um someone like DiBiaggio purchasing a brand, but speaking to them specifically about the spirits industry, so it's not directly related to me but understanding like what they look for and at the different levels that you can kind of aim for and it's, it's just one of those things that I hope more people do this because to have that number in your mind, like you're, you know, this is what I'm aiming for then to have the insights from the industry of what you should be aiming for and what's realistic and then reverse engineering back from there gives you a goal, it gives you a plan, it gives you like something to stick to if you're going down that route of building, you know, a business for sale or business to exit.
00:23:26 It's so interesting. Thank you for sharing that. Mhm Two mm Hey, it's doing here, I'm just popping in to bring you a quick message in every episode of the fSc show you'll hear women who were just like you trying to figure it all out and hustled to grow their business and I would know a lot of you might be sitting there asking yourself, but how do I actually scale my revenue and get to that next level from where I am now. You also know that so many of the entrepreneurs I speak to have mentioned facebook and instagram ads as a crucial part of their marketing mix from today onwards. I'm really excited to be able to offer our fsc small business owners and entrepreneurs and no strings attached. Our long chat with leading performance marketing, agency amplifier, who you might also remember from our D. I. Y. Course, Full disclosure amplifier is my husband's business.
00:24:31 And what's really important to know is that I've been able to witness first hand the transformation of so many businesses going from as low as $10,000 a month all the way To $300,000 a month and in some cases upwards to seven figures. So if you're listening in and you feel like you're ready to take your business to the next level, jump on a no strings attached call with amplifier where you can ask all the questions you have about performance marketing and whether it's the right time for you and your business to get started, Go to female startup club dot com forward slash ads, that's female startup club dot com forward slash A. D. S. And booking a call today, I want to talk about your marketing kind of more in recent times. Obviously you had a lot of this customer face to face, RL, events sampling etcetera in the beginning, but what's driving growth for you now and where for you, is it really important to allocate budget to acquire new customers?
00:25:36 Yeah, so I think, you know, it's interesting, I know a lot of people that come on here are Aecom brands and have that direct to consumer channel and that's such a small piece of our business right now, we've really just had to focus on retail being this frozen product. So the bulk of our budget is going towards trade spend, which is really just temporary price reductions on shelf or off shelf placement and then as well as demos in store, so really anything that's going to be actively at the store, catching customers there, although we are exploring things online as well, so building out our social community, we are bringing on ambassadors at this point in time and ultimately my goal here in the next couple months is to have this, you know, ambassador team that are all certified health coaches and have them be the ones that run all of our demos at the store level because I think it's just, I guess I'll back up, I was a health coach between quitting my corporate job and starting sacred serve and what I found was that was very powerful work, but it's very challenging to market yourself because for one health coaching is not necessarily, you know, profession that a lot of people understand or respect, and secondly, you know, the internet is crazy, so if you're this solo entrepreneur, it's just very hard to cut through the noise and so what I really wanted to do with Sacred serve was build this large platform to give health coaching more of that awareness and so if we can do that through demos by allowing these health coaches to be at a store like whole foods inside, where there's all these customers wanting to be healthier, they can be the ones to talk to our consumers, educate them on the product, but also share about what they do and offer their card for services or anything like that because I really think health coaches are this bridge to like You don't have to spend $1,000 on functional medicine and Western medicine is failing you, like a coach is the most important piece of that, so that's kind of the marketing angle that we're going to take is really educating and supporting our customers.
00:27:31 I love that, that's a really innovative, different approach to what I've spoken about usually on the show and I think that's such a, a clever way to go about it, very cool, I love it, it makes me think like I always think about like things that could implement for my own business and for ourselves and my business partner is a master familiar, but it makes me think like for demos and samplings, having more familiars work in the hospitality industry. You know, especially if they're just working in restaurants that are kind of like nighttime weekends kind of thing. Imagine what would be possible for them during the week in store and things like that. That would be so cool. I love that. You just opened the door for me. Great. Um, if you want to start this business again tomorrow, what would you have spent more money on in the beginning and what would you have saved money? Like it was a waste. You could have put that aside kind of thing. Yeah, I would have spent more money on a team. I think that that was definitely an oversight and I spent too much time and money Trying to run our own logistics, which that's a very tough catch 22 because it's very difficult to get in with distribution when you don't have the volume.
00:28:48 But I think I probably could have spent more time trying to find a very small local distributor instead of you know, running all those just doing it all myself. It's a very physical job. And so I think I lost a lot of motivation is the wrong word. But it just, it wore me down, right? So physically it was very, I was very worn down, which can affect the brain to so yeah, I would say I would have, I would have given myself more physical resources early on, when you say you would have hired a team like when you're talking about your own in house kind of team who would have been the first kind of people that you would have hired in hindsight. Um you know what I did was that we have manufacturing in house as well. And so that was the big piece of, you know, I think a lot of times people in food don't realize that they have this big option at the beginning is you can either manufacture the product yourself or you can have a co packer do it for you and there's positives and negatives for both sides. We went through out of manufacturing it ourselves, but that ultimately to make things very simple, can take twice as long and twice as much money to reach scale than it could if you work with a co packer.
00:29:56 So my first hire was someone to make the product so I could pull myself out of that physical role. But ultimately it would have been nice to have some type of, like, It wouldn't be called this at the start, but like CO0. Someone that was really focused on the logistical piece of that so that I could focus on the sales and marketing piece and really driving the growth. Yeah, that's really interesting. Good to know, I love that. Thanks Now I flagged this with you before we started recording so I may have put you too much on the spot, but if we can, I'd love to go through some kind of tactical lesson or piece that only, you know, now that you've gone through it that other entrepreneurs might not know yet. So something that is really specific to what you're doing to your industry and it could seem supe