Joining me today is Kerrigan Behrens, Co-Founder of Sagely Naturals.
SAGELY NATURALS was created with a simple yet powerful goal in mind: to harness the life-changing benefits of broad-spectrum CBD and natural botanicals to help you do more of what you love. Since 2015, Sagely Naturals has worked hand in hand with chemists and naturopaths to create products with an unwavering dedication to whole self wellness.
Kerrigan has built the fastest growing and the top performing functional wellness brand that harnesses the power of CBD to provide relief. Since its inception, the brand has been and continues to be on the mission to naturally modernize the medicine cabinet with high-quality, accessible offerings that help women feel their best.
In this episode we cover she and her co-founder Kaley got started with $30,000 of their savings that’s gone on to build the largest female founded CBD company in America in just 5 years, some interesting guerilla style marketing strategies they used to launch and have evolved over the years still to this day and how they got on the radar of Cameron Diaz, now one of the many celebrities who are invested in their business.
Please note, this transcript has been copy pasted without the lovely touch of a human editor. Please expect some typos!
00:03:32 Hi, I'm Kerrigan Behrens and my business is called Sagely Naturals. We are CBD wellness brand that's based in santa Monica and we are the makers of the number one selling CBD topical in the country. So it's called the Relief and Recovery cream and it's basically a natural version of icy hot. You get this nice cooling sensation on the skin. We started in 2015 and so we've been around since many people, you know, had not even heard of CBD and so yeah, it's been quite a journey. I'm excited to hear all about it. Does that mean in 2015 it wasn't like legal to have those products yet hemp always had this quasi legal quality to it. So, you know, you could go buy a hemp t shirt or like a hemp necklace, you know, from hippie shop, but the derivative of hemp CBD, you know, and any other things that are called cannabinoids, they were in sort of more shaky legal ground because people just didn't really understand what's the difference between hemp and marijuana.
00:04:49 Should we be nervous about him? We know we're nervous about marijuana, but we don't really understand. Um so yeah, at that point it was legal ish ish, it was gray, that's so cool, you're really at the forefront of um creating CBD products that are obviously so commonplace now and really not well known. Um I'd love to go back to that time before you started sagely natural is to figure out what you were up to and what was happening that got you thinking about starting a business in the first place. Yeah. So I have something called endometriosis. It's a disease that only affects women. Apparently it affects one in 10 women but not a lot known about it. What we do know is that it can cause chronic pain and for most women shows up as just like really bad cramps. But for me it was this and still is this chronic lower back pain. And so I actually thought I had you know a herniated disc or like a pulled muscle and I ended up going to 14 doctors I had steroid injections, I was told that I had arthritis.
00:06:06 I was told that I had potentially an auto immune disease. All of these things that ended up actually not being true at all. It's just really hard to identify this disease. But you know along the way I tried everything I had a prescription for Vicodin which I hated using because it had all these side effects that I knew about, you know the opioid crisis and I didn't really want to touch that I was taking adult so regularly that it started to make my stomach hurt. And so when a friend in 2015 told me about CBD I just got super excited. You know I knew that um that cannabis had all of these medicinal properties but I you know I grew up in L. A. So it's not that I wasn't familiar with um you know we'd but it wasn't really a big part of my life as an adult and so um at first you know I was just curious and then by the time I had tried all these different things, I was very excited when I finally actually saw it on a friend's kitchen counter in the form of a honey and I asked if I could try the honey, I put it into a cup of hot water and it just was one of those like life moments like I felt so good um you know my my back felt a little bit better, I was a little bit less stressed and I just wanted more and so that next week I went and I got my cannabis prescription the time in California you had to have a prescription from a doctor to be able to buy any kind of cannabis product.
00:07:43 And I very quickly saw that in the dispensaries there really weren't a lot of CBD products. And then the ones that were there were you know really um like doctor, you know dre like super psychedelic tons of THC um you know edibles, like things that I just didn't want. It was like where is just the plain CBD and then you know they were like we'll try a natural food stores, we went to a natural food store, there were a couple of brands that we're just selling CBD from him, um, you know, not psychoactive. I said, okay, this is the product for me. But then I started looking at the brands and they were definitely not for women, they weren't necessarily specifically for pain or for anything in particular. It was just this like, tincture, this bottle of oil and um, so I didn't really know how to do, you know, use it. So it just dawned on me very quickly that there was this opportunity to create a brand that could use CBD and other compounds from the hemp plant that would just be more approachable.
00:08:48 And in the meantime, my co founder, who I had met through a mutual friend, um we had been talking about potentially starting a business together, something in food actually, because our most recent career backgrounds had both been in food. And when I tried CBD, I went to her and I was like, forget food, it has to be CBD. Um and so she tried it herself. She thought, wow, like I would love to have a natural version of Advil. You know, right now, I'm going through what we now call the medicine cabinet makeover, which is that, you know, I care about what foods that I'm eating, I eat organic and yet for, you know what I'm putting on my body and in my body, it's not there yet. Like it hasn't evolved. So, you know, Advil is still what's in my medicine cabinet. So for her, she got really passionate about the natural angle for me. I got really passionate because I knew it worked and, and yeah, that was sort of the start of sagely Naturals.
00:09:52 So incredible. It's funny when you talk about, um, you know what the space, the landscape looked like back then when you would go into those stores and the products that you would find where I grew up in Queensland, there was this chain, I think it still exists today and it's called off your tree and it's like really bright green and bright yellow and I think it's got like a marijuana leaf on it and it's that kind of thing that, that it's so evolved, but that is really the memory of like what it used to be. And so I know exactly what you're talking about. Um it seems obvious now, but when you look back on your idea, how are you knowing that other people would want this product as well? And how did you go about validating it with friends and family and strangers. Yeah, We've always cared a lot about consumer insights. I went to business school and while I was in business school I had a couple of jobs in brand management and for both of the organizations that I worked at particularly talk about actually, which is the second one that I worked at.
00:10:59 It was very much, you know, using consumer insights to drive innovation to drive positioning. Um And so I called my brand management professor from business school and I said you know I feel like you gave us a pretty good sense of how to manage a brand that already exists but I have no idea how to create a brand from scratch. And she said you start with the fundamentals to start with consumer insights as you learned. And we got very lucky and she offered to actually give us some grant money from from U. C. L. A. Which is where I went to school and to sort of hold our hands through this initial consumer insights process. So we first started with like what are the questions that were trying to answer? And the question in really the forefront of my mind was what is going to be the barrier to entry for someone to actually try this kind of a product because I know that it works but someone else might not know that and they also might be nervous because we're talking about the cannabis plant and you know it might have a big stigma and so if I can at least know like what are people's assumptions about either CBD or about the cannabis plant in general, then maybe I can figure out like a positioning to get them more comfortable.
00:12:20 And so we figured out with this consumer insights work that the vast majority of people already believe that there are medicinal benefits to cannabis. So I wasn't going to have to tell them by the way, you know, cannabis can help with pain or cannabis can help with stress. Like people already just know that from, you know, stereotypes about the weed plant, What we figured out was that they were nervous about this feeling of getting high. So even though, you know, most of these people said, yeah, I'm not against marijuana, I just don't like the feeling of getting high. And so the beautiful thing about CBD is that that's actually one of the key benefits is that you can get these medicinal benefits without having to get high. And so that felt like the, you know, center message that we were going to really need to focus on and then, you know, with that in mind also, how do we make this brand as approachable as possible if people associate, you know, cannabis with, you know, psychedelic marijuana leaves and how do we make it feel more like a normal everyday products that you would have in your medicine cabinet and not just normal, but something beautiful so that you want to actually put it on your kitchen counter or in your purse.
00:13:37 Um, and so having, um, you know, slightly feminine, really approachable packaging became a priority. Um, so yeah, just asking questions through survey work was really where we started and then as we went along, you know, I would print out a box that was a prototype and I would do a really informal focus group and I would ask people, you know, when you see this box, what does this convey to you? Um What other information are you looking for that you maybe didn't get when you looked at it for the first time. What's the first thing you notice? And then the step beyond that was we had a prototype and actually giving it to friends and family and having them try it and sending them a survey and you know, it's anonymous so they don't have to feel guilty about saying like this product was terrible, I hated it. Um The good news is we got like really glowing feedback on that first product and people said yes, this is something that I would use if I didn't, you know feel well and this is something that I would pay for.
00:14:42 And so that was the initial validation that made us actually take the leap from This is an idea to let's actually invest our savings to make this product and create our first website. Wow. So after you've gone through the process of validation and you knew you were onto something, How were you actually rather while you were going through that process, How were you actually developing the samples and the formula? I guess you could say yeah, it's funny because I remember my mom like very early on when we were starting the company. It was like how do you even know how to make? Okay. Yeah, I studied history in college, you know, and I worked in finance like so she's like you're not a scientist like how are you doing this? And it's not even a joke like google. Like google is the answer to everything today. Um My co founder and I just started googling contract manufacturers um you know in the L.
00:15:46 A. Area because we wanted them to be nearby because we wanted to be able to actually go and um you know, sit with the scientists while they formulated the products. Um And that is a much faster way by the way for anyone who is looking at contract manufacturers, if you can find someone that's local, it is a lot faster because then you can go into the lab and they can create five versions while you're sitting there as opposed to um you know, having them send it and then you're waiting a week to give them feedback. But yeah, we found a contract manufacturer here in L. A. We toured their facility felt like they had, you know, really good quality procedures. And the biggest thing actually was that they were willing to work with us on a really small run. So I think what people don't realize um what I didn't realize anyway is that When you're starting with a contract manufacturer, they typically require you to do runs of um you know, could be 10,000 units, um, could be more depending on what the kind of product is?
00:16:55 Um, we couldn't afford that. We could afford 500 units. And so the real trick was pitching the owner of the contract manufacturer to say, you know, this is almost like he was going to be an investor. Like this is why we believe we're going to tap into a market Naruing that's not being met. And we, by the way, can afford to pay you and you know, we're going to commit to the next time making even bigger run. So this is the only time we're going to ask you to make 500 units. Um, and that was the case, we started with 500 units. We sold them. Next run was 5000 units. That was a really big deal for us. Um, we sold those and you know, now we're making um, runs of, you know, easily more than 10,000 units at a time, depending on the product. So, um, so yeah, pitching the co manufacturer is a really important part of the process when you're just starting out. Unless you have, you know, a good amount of funding and can actually afford to, to create a big batch of products.
00:17:58 But actually, even then, I wouldn't recommend it because you just don't know um, what products are going to speak to the customer, you might end up finding out something after you make it that you want to change. So. Yeah. The smaller run the better for sure. At the beginning? Yeah, totally. I'm wondering when you said you were looking for a local manufacturer, did that mean you had to kind of balance out if you were staying local was the price higher versus working like offshore? Yeah. A great question for our category, we didn't really have the option to look to china or you know, somewhere that that would have certainly been less expensive because CBD um was not being there was a legality issue, right? Like we couldn't, right, we could ship the CBD overseas. We didn't even want to got it. That was the most important consideration. Was would the contract manufacturer even work with CBD because we called 100 before we found one that said yes, most companies wouldn't deal with that kind of an issue but also unique situation in that there are a lot of contract manufacturers that are based in L.
00:19:16 A. Like just outside of L. A. So it was very easy for us to find um to your question though, we do sort some things from international, um like our packaging, a lot of our packaging comes from china. Um there's no reason why we need to have packaging that comes from the U. S. Um but as it relates to formulation, we wanted to be really really close to it, not just for R. And D. Purposes, but also for quality control. We wanted to actually be in the lab when they created the batch, You mentioned at this point you were funding the business through your savings. Are you able to share like ballpark figures on how much savings you needed to invest in those early, you know the 500 run and then the 5000 kind of giving you that runway before you needed to look to to go further. Yeah, I think we started the business as cheaply as we could. Like looking back, There's actually not a lot that I think we probably didn't need to spend on that.
00:20:19 So we, my co founder, Kaylie and IH invested $15,000 into the business. So we started with $30,000 and I want to say like at least half to two thirds of that was just for the product. And we started with one and we wanted to start with three. Um and you know we talk to an advisor and the advisor was like you guys are kidding yourselves, if you think you have the money to a produce this much product and then be you know get the message out about these all these different kinds of products like Focus, Focus Focus. And so we started with the one product and we did pay someone to help us set up the website, it was kind of a disaster, like the page was just terrible and the people that created, it wouldn't give the site back to us unless we left them a good review even though we were like just so unsatisfied with the work.
00:21:21 It was, it was ridiculous. But I think we actually did everything as cheaply as we possibly could. Um One thing I'll say is that I, so I'm the marketing person and my co founder is the finance and operations person um and I always thought what's going to make this brand special is the brand? Like our products need to be amazing, but that can't stand alone, like the brand has to be really special. So I said let's hire a branding agency. My co founder was like like we won't be able to afford anything other than the agency and the product like we won't be able to afford the website um any of this and I was like I don't care, let's just find a way to make it happen. Um you know, I'll find a few extra $1000 in my savings that I need to. Um and then she, she went behind my pack and she went on to 99 designs. And so while I was talking to this really expensive agency and starting to get like you know, initial thoughts from them like mood boards and you know pie in the sky, like what this brand could can actually stand for.
00:22:30 My co founder got like a logo and the package all for like $500. And she showed it to me and I was like, oh, like this actually isn't horrible, we're planning to spend so much money with this agency. And so I was like, initially annoyed with her that she did this, but then she ended up being totally right, like we didn't really have the money to pay this fancy agency. And um the point is when you're getting started, like nothing needs to be perfect, like it's all just an iteration, like you should be thinking about things almost as like a draft. So that ended up being the right call, like going with this cheaper blow go and packaging designer, um you know, it wasn't as special as I think our branding is now, but it gave us something to at least start with. And um yeah, so $30,000 was what it took to make a product to put up a website and, and that's about it, that's all we had money to do. We couldn't afford to pay ourselves, we couldn't afford to hire anyone.
00:23:34 Our big task in those days was just like finding revenue. So, you know, finding our first retailers to carry the product, um and then trying to drum up as much, you know, word of mouth as we could for the website and that's definitely what I want to start talking about now, I'm super excited to dig into the marketing side of things. Obviously given that you're, you know, the marketing person in the business also that you have a $0 marketing budget and of course you also have. I'm assuming lots of red tape around, you know, advertising on platforms like facebook in general. So what did you start doing to get the word out there? And how did you get on the, you know, on the radar of the retailers you wanted to be stocked at? Yeah. Again being in L. A. Is helpful for for a wellness company just because we have a natural food store on every corner, you know, in addition to the whole foods of the world's um people just really care about wellness here. So we literally started knocking on doors of local retailers.
00:24:38 So there was a natural food store down the block from my house and I had gotten to know the guy that worked on the floor of the health and wellness department pretty well while we were creating the company, they were already selling CBD. And so I had been going into the store um and I was pretty upfront with him. Like hi I'm Carrigan, I'm thinking about starting a CBD company. Am I going to bother you if I come in and I ask you questions from time to time And I think he was like interesting, okay, like she lives down the street, you know, I otherwise I'm going to be talking to some customer that needs, you know, to find a recommendation for whatever tumeric castles. So sure I may as well talk to her. And so he gave me a lot of really interesting insights about like what would it take for him to carry the product. And we took his advice. Um and so once we actually had a product, he was the first person that I went to and I said, you know, look how we took your advice.
00:25:47 Um here's the product we came up with, are you willing to buy? You know, a case of it? And he was like, sure. And so he was our first customer and that was like one of our most important retail partners for a really long time actually. You know, even still is, even though it's just a single store because a, like I still have a good relationship with him, he still has his finger on the pulse of what's going on with wellness trends and um you know, now that the space is so much more crowded, like he's there to give me really brutal advice. Like, you know, this product isn't selling as well anymore. This one is now taking off for um, so having that relationship with him is something that I couldn't stress enough, like is incredibly important and you can't do that with every single buyer, but you know, even if you just have one, like it's meaningful and so once we got in there, you know, we went to another natural food store, hi, we're now sold at rainbow acres in marina del Rey.
00:26:51 um you should carry us to and the conversation was um of varying degrees of difficulty. So if a store was not selling CBD, we automatically knew that the conversation was going to be a lot harder because it wasn't just going to be, here's why our product is special within CBD. It was also going to be, this is what CBD is. This is why you shouldn't be nervous to sell it. This is why your customers are going to end up caring. But so we tried at the beginning to target stores that were already selling CBD. It just sort of paved the way for us at that time. We actually also sold in dispensaries. So, um, even though our products were made from him, but even though there was no THC in our products, even though they didn't make you high dispensaries were selling CBD and um, and we knew that they understood the benefit of it. So the cool thing about dispensaries, um, is that they pay you in cash um, and they pay you when you deliver the product, there's no payment.
00:27:54 Amazing. Yeah, it comes with complications. Um, you know, you literally could get a call at midnight saying, hey, we're sold out, can you come by, yep, there's not a lot of the organization um, in these businesses, I think it's changed quite a bit in five years, but, but yeah, so we got cash flow from these dispensaries because they paid us right when we arrived. And even if the money smelled like weed, it was it was money and it was accepted by our A. T. M. Um and then the natural food stores started to give us credibility. So we actually got ourselves into about 150 stores just knocking on doors. And by that time um we were able to convince a distributor, a regional distributor to take us on and to help us start to sell into stores. So once you start working with the distributor, they're never going to be as good of a sales person as you are. But they have, you know, the relationships already with the buyers and also they can be in locations that you physically can't.
00:29:00 Um so yeah that was how we went from, you know our first couple doors to our 150, wow, goodness gracious. That's a lot. Were you also doing efforts to get people to buy directly through your own website or in the beginning where you like, we're just focused on retail. This is how we're going to get in front of new customers not having money. Um It does make it harder to get people to the website. Um With that said we were doing local um sort of guerilla marketing tactics. Um There's a really popular running spot in santa Monica that's called the stairs and um you can imagine, you know, it's just a steep set of stairs, People go there on Saturdays and Sundays to get like that extra sweat going. And so we we paid a massage therapist that ended up actually becoming um something we did quite frequently at marketing events um you know, up until Covid actually was still something we were doing um we'd bring the table, we bring a massage therapist, a woman that we ended up developing a really great relationship with.
00:30:11 Um and yeah, we we put up a tent right at the top of the stairs and we had the massage therapist there to give people little rub downs when they were done with their workout. Um and so you know, you can imagine people were curious like we had bottles of water and we had, I forgot to mention. We also created these little sample packets of of the cream. So when we did our first production run we had the option to add, you know, a couple 1000 sample packets and that was like one of the most um important things that we did because we were able to actually just hand out the sample packets. So even if someone didn't want to stop for the massage, they would get a little sample packet on their way. And that was driving people to the website. So when we had those kinds of events we were telling people to check out, you know sagely natural dot com. That is so cool. I love that. And it's also just so um I mean it makes so much sense, but of course it's just genius the evolution of that idea as we've been able to start spending more money.
00:31:18 Is that this year we actually were the first sponsor of a major marathon um in cannabis, so the first ever cannabis sponsor of the L. A. Marathon and um in the halfway point of the marathon we were spraying people's cabs with our relief and recovery spray and um and some of the runners were actually like taking the bottles from us um and ended up sending us emails afterwards saying, you know, I wouldn't have been able to finish had you not been there? So that idea ended up evolving, you know, obviously we couldn't afford a major sponsorship at that time, but the idea really, really worked and so we've found ways along the way to actually scale that idea. That is so cool. I love that. What a cool experience I had never I've never seen something like that. Really cool. What else do you do now? Like that's driving growth for you, you know, five years down the track. Um Again, like performance marketing is something I assume is a hurdle for you guys.
00:32:23 Um But what's currently driving growth? Yeah. Um We do still deal with issues um you know, google and facebook still don't allow CBD companies to just go on and take out an ad. So we still have to think about alternative ways And um and you know that that marathon idea like now obviously with Covid we can't go and and meet people where they are. But that's sort of the mental exercise which is like, well where are people now if they're not, if they're not running marathons, if they're not, you know at the store, spending a lot of time in the store, how can we reach them? And so um you know, there are things like podcasts. Um there are still media options that people are really engaged with even through Covid. Um, and then online it's um there are still some traditional things like, you know Programmatic advertising.
00:33:27 Um search engine marketing. Like even though we um have to go through some extra hoops to make it work. Um they're still important parts of our overall growth strategy. Yeah, totally. I wanted to ask you about your, I read that you had some investment throughout the process and you had a lead investor in Cameron Diaz or I don't know if she was a lead investor rather she was an investor. Cameron Diaz and I wanted to know how that came about and how you attract someone like that to being involved with your business. So um now I feel like I'm being so annoying about L. A. Um I do love L. A. But I also love many other parts of the world. So I am not like overly biased towards L. A. But that's another thing that it is a little bit easier just because so many celebrities live here, it's just so happens that Cameron um experienced our products for the first time through a fund that does due diligence specifically for celebrities.
00:34:37 So the front the fund um it's just really like on top of the pulse of new startups particularly you know, in the local scene and actually like there's a particular natural food store that's really high end, that is always ahead of trends. And I know like this fund as well as a lot of other funds in the wellness area, like spend, you know hours and hours every month in the store just looking at like what are the new products that are being carried and and that's kind of how they found us is that we were starting to sell our products there. Um They knew that Cameron was interested in in CBD um and so you know, they gave her a bottle of our cream, she really, really loved it and she asked th