Today I’m chatting to Katina Mountanos, the founder of Kosterina Olive oil.
We’re talking about the gap she saw in the market that also happened to be in her backyard, literally. Why she thinks you shouldn’t quit your day job. And some pointers when it comes to building the DTC side of the business shipping heavy, glass products.
Kosterina is the pioneering Greek Extra Virgin Olive Oil Brand dedicated to delivering the highest possible quality Extra virgin olive oil to the market. Kosterina’s olive oil is created from single origin, early harvest Koroneiki olives from founder Katina native home of Southern Greece. In addition to the Original Extra Virgin Olive Oil, Kosterina also offers flavored varieties in Greek Herb & Lemon, and Garlic; a line of Balsamic Vinegars from Modena, Italy and Dark Chocolate and olive oil cakes
If you want to learn directly from women like Katina, come join us in our private network; Hype club. You’ll access what we’re calling modern mentorship, business resources and some really incredible women building the future CPG brands we’re all going to know.
Please note, this transcript has been copy pasted without the lovely touch of a human editor. Please expect some typos!
Um, so I'm Katina Mountanos, I'm the founder and CEO of Kosterina and Kosterina really is a wellness brand centered around high antioxidant extra virgin olive oil from Greece. And the reason that the company exists is really because my family comes from a small town in Southern Greece. We make really premium extra virgin olive oil that serves a few families and you know, I was essentially just horrified by the taste and the quality of the olive oil. I was finding here on the supermarket shelves. We always imported it from our family farms in these large glass crafts and I'd run out to the supermarket to buy more when we ran out of what we brought from Greece.
00:04:58 And um, you know, I would buy greek extra virgin or italian extra virgin and it just tasted absolutely nothing like what my family made and our town in Greece is actually called Caroni and Corona Key, which literally means from caroni is the most popular varietal of greek extra virgin olive oil grown throughout all of Greece. So this seed and trees actually from my hometown. So we're literally like the source of the most popular varietal of olive oil in all of Greece, which is amazing. I love how you were literally able to look into your backyard to start a business. Yeah. What have I got under my belt that I can actually bring to market olive oil. Yeah, I always think about how in writing they say write what you know. Um and so I think it's the same in business, Start what you know. Yeah, that's incredible. But you haven't just started this business, you've started another business before, that you've exited that business, You've had a crazy impressive career. Could you give us kind of a bit of background info into what led you to this point and kind of where you started getting that itch to start your own business.
00:06:05 Yeah, absolutely. So I started my career in investment banking, um I worked in banking for the shipping industry for four years, so very, very different from the type of work I'm doing now and I went back to business school after business school, I moved into CPG and I knew that that's always what I loved and what I was most interested in, passionate about. Um and so I spent some time at Loreal developing beauty products, both in hair cosmetics, skincare, before having my first startup experience. So I fell in love with startups at a company called Quincy, were eventually acquired by amazon and ran a number of different e commerce sites, and I remember my first day on the job there, I walked into my boss's office and said, I'm thinking of reaching out to these brands, and she said to me, why are you asking me? And that just clicked for me, like, oh, this environment is totally different and it was just something that I fell instantly in love with, and so had that experience. Um we were a startup company acquired by Amazon. I then left to start my first startup with my co founder, had an incredible journey there.
00:07:06 Um we started a company called Manicure, which was eventually acquired by Elizabeth Arden Red door spas, and then went to another startup, started by the same founder as I had worked for the first time, A man named Mark Lawrie who started Jet dot com and then Jet dot com was very quickly acquired by walmart and at walmart, I was actually building brands that sold both on dTC direct to Consumer online, but also in walmart stores, which was also an incredible experience before launching Coast Arena, Holy molly! It's a lot, a lot of cool stuff going on over there, wow, when you were working through these DDC brands and kind of getting the toolkit under your belt, as you could say, what are the things that you saw that you knew were critical in building this business and what are the things that you saw that were like, what leads to failure and like what goes wrong that you need to be mindful of? Yeah, I think something very top of mind was the importance of being omni channel, meaning going direct to consumer alone can be very tough and quite expensive.
00:08:10 It's just very hard to get a customer to arrive at your website and make a purchase. Whereas if you are in brick and mortar stores and of course I learned this at walmart which has a huge presence in the US that it really serves as a billboard for your brand and helps to raise awareness and of course there are other costs to selling in retail. But you know that marketing is invaluable and just being where the customer is when he or she is shopping is super important. Yeah, I love that. And I think that's something that a lot of brands seem to be changing the strategy on in today's landscape like brands like away, which were completely due to see in the beginning, I now have that retail presence and that's the only one I can think over the top of my head, but I've seen a lot of that happening. Yeah. And of course the other way around just with the pandemic people who were brick and mortar focus going online as well to serve their customers during that time where most people were shopping online. Mm And what about the flip side of the coin when it comes to, what are the things to avoid all the pitfalls that you saw and things that were failing? Like in terms of strategy or in terms of product development or whatever it was.
00:09:13 What were the things that you were like? Mental note? I'm going to avoid that. Mm um that's a tough one. I think that growing too fast can often be a detriment in whatever form that takes either in product proliferation or skew proliferation, launching too many products too early before you're ready or before the customer has established what you are as a brand in their own mind or expanding into too many retail outlets too quickly. And or you know, if your service expanding into too many markets to quickly and making sure that you've nailed that playbook and exactly how you're going to reach that customer in a cost efficient way before, you know, doubling down on that expansion. Hmm. Well, let's jump into it. I want to go to like that early development phase where you've decided to take the leap. You've decided to start your second business and go all him again. How do you get started And what are the key kind of moments to bringing this brand to life? Yeah. I think my story is a bit unique because I really started coast arena as a passion project. I was working on at nights and weekends while I was still in my full time role.
00:10:16 And you know the reason that I started it was because I learned about the health benefits of early harvest extra virgin olive oil. Um you know, I think all olive oil is healthy. But what I learned was that when you harvest and olive early and actually take it off the tree before it's ripe while it's still green, you preserve these natural polyphenols or antioxidants that occur in that olive. And basically what that means is these antioxidants have been proven by essentially hundreds of studies I would say it's undisputed to reduce the risk of chronic disease. So we just, your risk of cancer, diabetes Alzheimer's it's really unbelievable and so so powerful and I thought that the U. S. Consumer didn't know it. And so I was really beginning my own wellness journey and it became so passionate about just telling people about the health benefits of this kind of olive oil. And so yeah really launched it as a passion project. I went through the entire hello ponies which is the southernmost region of Greece meeting with all the high end um small batch early harvest extra virgin olive oil producers and I launched a small squarespace site that I put up on my own.
00:11:18 And I sent an email to two or 300 of my closest friends and told them, you know, I'm launching this brand that I would love to hear what you think if you have a chance to try it. And you know that first year, I think every single email address that came in for an order was someone I knew. And then slowly I began to see email addresses or you know, names that I didn't recognize and noticed that the brand was truly growing organically and word of mouth was working and the products olive oil truly is some of the best in the world. The thing that makes it so healthy also makes it taste amazing. So it's very inherently shareable with families and friends because it's often on the dinner table and people are talking about it and it also happens to be in a beautiful white bottle. And so yeah, that early word of mouth is really sort of what got the brand going. There are a few things that happened that made me decide to leave my full time role to focus on coast Arena full time. And the first was that I ran an NPS survey um, if you're not familiar with mps that stands for net promoter score and the NPS literally came back at 100 which means that literally everyone who answered the survey was a promoter and I had said that they were very highly likely to recommend the product to a friend or family member.
00:12:28 Of course that was a small base. But I had done NPS surveys for all our brands and never saw anything, you know, even close to that level. And so it really just for anyone listening to just quickly caveat that what it specifically is, is it's just one question, right? And it says how likely you to refer this to a friend and you ask this in a survey or at the end of check out at some point. And it's just one question, right? It's just it's just an email. It's literally an email to everyone who has placed an order And they can answer it with one click. So they literally click one through 10. Um, super simple, but a very good indicator of how, of the quality of your product or service, wow 100. That's incredible. Yeah. So that, that NPS score definitely made me think that there was something there and that consumers were really, you know, like this, the second thing that happened was that whole foods market reached out. They found us on instagram and you know, when I was thinking about launching the brand or how to make it. Omni channel whole foods was really like the top choice retailer for us there, you know, the best in natural organic products and we thought it was just the right consumer.
00:13:36 And so they reached out, it was very early. I still wasn't full time on the brand, but it was actually their invitation to come present to them at global headquarters in Austin texas that made me realize I was going to focus on cost arena full time, wow, how do you think they found you like we're using hashtags in your content, like were you following the playbook of instagram or like somehow someone told them about you and they came across you that way. I think that they were looking for greek, extra virgin olive oils, I think that there weren't that many and they were probably searching, you know, we were using hashtags, but it was all me and my brother doing our social media content at that time, but we were definitely not experts. Um we're really posting like organic content that we thought was interesting to share about the brand and the mediterranean diet and lifestyle and yeah, I think they found us through a search on instagram, wow and to paint the picture what kind of revenue or what kind of numbers were you doing in that early, like first year when you were kind of thinking this is a passion project and whole food rolls on up and it's like, hey, we want to stop you.
00:14:40 Yeah, I mean we were tiny. I mean I think that first year we probably did less than 50,000 in revenue. Right, wow, what a signal for, like what could this become, this is, you know, something that really is a gap in the market and is what stores and retailers are looking for. Its incredible. Yeah. So we were very, very lucky that they found us incredibly lucky. What kind of capital did you need to actually start the brand? And how did you finance it in that beginning phase kind of leading up to the launch? I definitely self funded the business for the first two years and I really believe in just putting something out there even if it's not perfect. So we've iterated on our bottle and our packaging in the beginning. I think 10% of our orders, actually bottles broke during shipment, 10%,, which people were having olive oil all over their front porches. And so that was a big problem. Um, we eventually figured out how to create boxes. We worked with the packaging designer and created boxes an hour. Breakage rate is less than 0.5%.
00:15:42 So very, very minuscule. But the way that we did it as um, I definitely offered equity for services when we needed branding work. I worked really closely with an agency who I loved, who had worked with in the past and offered a little bit of equity in exchange for very low pricing. You just really have to be as scrappy as possible and you know, you're not spending thousands of dollars on facebook ads, you're really just trying to work word of mouth and DM people who might be able to help you and you know, once you do raise venture capital, that's when you can sort of step on the gas and really try to grow the brand and get the word out there. Yeah, for sure. And at what point did you start that kind of process to raise venture capital or what was the signal that you were going to need to raise capital to actually keep the business going and to scale that growth? Yeah, it was really the size of the runs needed to get bigger because what was happening is I was doing really small runs of product, I would sell out of that and then it would take 2 to 3 months to get back in stock. So I would be out of stock for, you know, a quarter for three months at a time until I could get back in stock.
00:16:43 And because, you know, I needed that revenue in order to produce more products and so knowing that, you know, we wanted to grow and I was going to leave to focus on it. So as soon as I did, that's when I went out to raise capital, I raised from a precede fund here in New York who is run by someone who I know well, I had actually been advising for his fund on all his consumer investments leading up to that point, which of course made that first check, getting that first check much, much easier than, you know, for example, getting the first check and when I started my first startup, which was, you know, we probably talked to 80 angel investors to get those first few checks. So yeah, that helped a lot. And having the first round b institutional capital definitely helps set you up nicely for growth from there in future fundraising rounds, was there any advice that you received personally before you started that part of the journey that you would share with other entrepreneurs who are listening, who kind of want to follow that same path of food shopping until a certain point and then looking for institutional funding or angel funding. Yeah, I think some advice that I got that I followed was, you know, don't quit your day job because product development for a new brand actually takes quite a long time and, you know, you don't want to be waiting for your brand to launch for two, maybe three years until you get that product right.
00:17:59 Um, so that takes a lot of time. You know, you want your paycheck coming in, of course, working full time is extremely demanding and it's very hard. But if you're willing to put in that work nights and weekends to try to make it happen, I definitely recommend it also takes the pressure off yourself a little bit because you may then rush to launch something too quickly before you're ready or you'll put out a product that's, you know, I still believe in rapid prototyping, it does not need to be perfect before you launch it, but you know, I do think taking that pressure off yourself helps and you can begin to talk to investors more casually before you like really need money, which helps a lot. Let's start to make those relationships before get feedback from investors and just start networking the, the entrepreneur community, you know, I'm based in new york and so I only know it here, but I think it's the same throughout the US and places like Boulder in san Francisco and L. A. Where entrepreneurs are really, really willing to help each other and the most entrepreneurs will take a meeting with another founder to share. Learnings, introduce you to angels that invested in them and sort of teach you about their own journey.
00:18:59 So I think starting to have those conversations sooner rather than later, always helps. For sure. We've just been having conversations on that kind of note, We're already starting to have conversations with people who are in the m and a space for our brand to understand like what that roadmap needs to look like and at what points they look to acquire brands, you know, are they looking at profit? Are they looking at growth and like what we need to do in five years time, for example, to be prepared versus waiting and then being like, oh, so now what do we need to do? So I think that's always something interesting for people to know is like start having conversations early regardless of whether you need to or not just build that network and get people sharing what they know and helping you with the learnings. Sochi. Yes, definitely. And it's great for them too because they want to know what's going on and what new brands and new products are coming out. So it's a symbiotic relationship for sure, explain hey, it's doing here.
00:20:05 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 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 three $100,000 a month.
00:21:06 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, going back to, you know, you got into whole foods, what year are we talking here? When was this happening? We launched in whole foods just last year in 2020 in the summer of 2020. So Since then from 2022, now, obviously there's been a pandemic. So things rapidly would have changed for you. I'm sure when it came to your strategy and things like that, what if the tipping points been all those key moments of change and momentum since then, that kind of propelled you forward? Yeah, I think the big tipping points for us have all been pressed related.
00:22:11 Um, and so we had a few times where one where we were featured in the new york times and when we launched our chocolate, we make dark chocolate bars with extra virgin olive oil as well. And our chocolate was featured there. It brought a lot of eyeballs to our website and we had an incredible day of growth a few months after that, we were featured on the Today Show, which was the really big one. Um and so the Today Show featured us on a segment called She made It, which was also focused on female entrepreneurs And you know that day was just insane. We sold out of literally every last unit of inventory that we had in 20 minutes. Um and then the show continued to air across the US and all four time zones and we were completely sold out again. This was before we had raised a large amount of funding and so we did, we weren't doing huge runs, but it was just incredible. Like we were just watching the traffic and the site and so you know, I think our story resonated with people in the US, where we explained where everything was coming from in Southern Greece to explain the health benefits and you know, it really was a family business and so yeah, really really excited.
00:23:14 We got emails from people across the US saying like we can't find products like this in Wisconsin, thank you so much for sharing and we're so happy. We found you. So that was a really key point of growth for us as well. What a nice moment to read those messages and have that kind of like moments of delight that give you the delight. Yeah. If you're going and keep you feeling like, yeah, I'm onto something really great here. Did that make you think about like obviously you started with whole foods, What was your approach then to retail distribution and that omni channel kind of approach and and how do you kind of scale that now? Yeah. So many thoughts here. Um, I don't even know where to begin, but we were probably not ready for whole foods when they reached out. As I mentioned, you know, I was officially just transitioning to focus on a full time. I remember, you know, we were invited down to the line review and they sort of give you this template deck to fill out to present your brand to them. And the first slide was please list all your team members who are arriving for this meeting. And I was like, it's just me, it's not here yet.
00:24:16 And so we weren't ready. They wanted to launch us nationally, We didn't have the supply chain set up to be able to do that. So we actually ended up launching in three regions. We're excited to be expanding that next year. So we launched our olive oil and three regions are balsamic didn't have the same sort of supply chain constraints. And so that's actually in 350 stores. We launched in august of last year, our marketing plan for whole foods was 100% centered around demos, demos are where you actually like taste the food in store as people are walking around. Of course, that all completely got shut down during Covid. You know, our thoughts were this olive oil tastes amazing as soon as someone tasted on a piece of bread and a whole foods store, they're going to purchase it. And so then we had to get really, really creative around sampling. We created closed single serving packets samples. We of course wanted to be sustainable. So we were looking for a paper supplier as opposed to have plastic supplier. So we sort of ran around looking to get that done and we were able to distribute clothes samples and store, which really helped drive our growth.
00:25:17 But we did have to get creative, you know, educational demos are not the same as actually tasting the product right there. And then we really doubled down on digital, tried to spread the word digitally. We partnered with a lot of whole foods brands on social and email for giveaways to really sort of have the customer associate us with other whole foods brands and both brands or three brands at a time with whole foods market itself? Wow, what is it like when whole foods places an order? Like how many units do they place if they're going to put you nationwide into all of their stores? Um, yeah, so it totally depends on your product category. And how many regions urine. So the way that it works is whole foods works with distributors, We actually work with two distributors and distributors for those who may not be familiar with the industry are sort of the middlemen. It makes it so that you can ship all your product or have your product picked up by like one entity who then can distribute it to all the whole foods stores, particularly if your product is cold or frozen, you have to work with the distributor is gonna be very hard unless you have your own supply chain built out to bring like a refrigerated or frozen product out.
00:26:24 Our products are not refrigerated or frozen their shelf stable. So makes it a little bit simpler. But the way that it works is at least at whole foods when you launch, you need to provide six or you need to provide a case Free for every store that you're launching in. So that's a pretty significant cost if you're launching nationally. Um, you know, with nearly 500 stores, you multiply that by your case size, whether it's six or 12 or 24, you know, that's a significant inventory investment that entrepreneurs should consider and you know, you may want to raise capital or at least have some cash in the bank from however your funding the business before embarking on an endeavor like that, wow. And so when all this was happening for you and you were saying, you know, you haven't actually got a team yet, you hadn't had funding. Was it a scramble? Like what did it actually look like? Like how did you actually get it all together then? Yeah. Um it was a scramble and you know, we actually had plenty of time because these line review meetings happened like nine months before the reset actually happens. So you have plenty of time, but the learnings are just so vast if you've never done it before.
00:27:28Edit Like what is the distributor? How do I price my product appropriately for a distributor and for any entrepreneur who's thinking about going down that road, definitely like consult with some experts who can help on your pricing and make sure you build in enough margin for yourself in order to do promotions that shelf, there's actually some tricky math that goes on, making sure your product is priced perfectly. So the distributors are definitely like a key piece. Yeah. And I think like for me it was understanding like how you actually got all these things together as a one woman show without all the funding and like what you needed to do. But you've answered it, there's a long lead time. So you're able to work with consultants to figure it out. Yeah. And I was able to hire a few people on the team before then as well. Got it. The other thing I wanted to know and I mentioned this to you before, we jumped on the recording because I'm developing this non alc wine company, which obviously looks to be a similar kind of shape to the bottle that you have in terms of it's big, it's glass and it's heavy. What do entrepreneurs who are shipping something that is heavier and breakable? What do you need to know?
00:28:32 I know that you've said you design specific packaging, but I imagine this um you know, it changes the price of things, it changes the costing. You need to be smart about how you run your ddC business so that you're not kind of losing money. What is the approach for bottles that are heavy when it comes to shipping and things like that? Yes. So obviously shipping cost is going to be much higher. Shipping cost is a pretty significant part of getting to your gross margin on the DTC channel. So you'll definitely want to build out your unit economics very carefully. And when I say unit economics, you want to look at, okay, what does it look like when someone orders one bottle, what does it look like when someone orders three bottles, what does it look like when someone orders a case? Because you're shipping actually doesn't increase by that much when you add additional bottle. So from 1 to 2, it's very negligible. So you have sort of more margin to spread over one shipping cost when multiple bottles are purchased. So you can create rules for your customers. Like maybe you don't actually sell one bottle at a time. Maybe you only sell them in packs of three or packs of six which of course can affect your conversion.
00:29:34 So it's always a balancing act. Then you have to think about your um whether you're gonna offer free shipping and if so at what rate how much you're going to charge customers for shipping, whether you'll charge them exactly what it cost to ship them to their house or whether there'll be a flat feet across. And so that's really like that happens on a spreadsheet. Once you have a sense for what your costs look like and just be ready to make changes and edit and iterate on your policies as you learn more and more. Mm hmm. Yeah it's so interesting. And I think like the bringing in strategies around bundling and the certain Shopify apps that you can plug in to help you work all that stuff out is something that can be actually overlooked especially when you're kind of just getting started and you haven't done this before. So it's so interesting to go from products that are light and can be shipped like a silk scarf or a piece of jewelry. Two bottles that are weighing a kilo or potentially more. Gosh. Um The other thing to think about for non alcoholic wine is subscription. Um You know if you've got a product that people love they'll want it um on a recurring basis.
00:30:37 and so we use an app that's very common commonly used in the D. C. World called recharge which powers all our subscription. So that's something for you to make note of. For sure. Oh wow. Yea