Adam Torres, Pat Turpin, and Bruce Cardenas discuss CPG trends.
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Show Notes:
Listen to the Mission Matters Future of Future of CPG Growth Summit coverage. In this episode, Adam Torres interviews Pat Turpin, Senior Advisor and Board Member to CPG companies, Bruce Cardenas, Brand Champion at Legendary Foods, explore trends in Ecomm and Product Growth.
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Full Unedited Transcript
Welcome everyone. First off, this is going to be a lot of fun today. Pat, amazing story. Amazing story of entrepreneurship, of being an entrepreneur as well. We have Bruce. Bruce, another great entrepreneur, intrapreneur, highly interesting stories. And one of my favorite parts about doing this is we get to bring these stories to you.
Just to let you know a little bit about the format, I’ll do a little bit of the questions. I’ll get us started, but then we’ll start at the end. There’s going to be definitely time for a Q and A. Think of this as a, you know, small, intimate fireside chat and I’ll get us kicked off. So first thing, let’s start with the bios.
So, Pat Turpin was president and co founder of Popchips Inc., so I’m sure we’ve all heard of that brand. He was also vice president of Costco Wholesale Corp., and he also launched the Costco’s gas station business, which I got a story about that for you, Pat. A good story. Harvard did a case study on Pat’s launch of new businesses at Costco, so kind of a big deal when it comes to, A lot of entrepreneurs in here that are launching brands, growing brands.
I want to know what it’s like to be behind those, that big, big brand. So we’ll talk about that. And then also what you did at Popchips. And Pat currently sits on the board of numerous food and beverage companies, which I’m interested as well to know about the personal brand and how you carry that brand through your career.
Cause I see the pattern and I want to know the tips, man. So we’re going to get into that. And then Bruce on the other hand. So Bruce his journey spans from the United States Marines, where he served all the way to the LAPD, where he was awarded the highest award, the police medal for bravery. Bruce, again, as I mentioned, he’s an intrapreneur and he did some amazing work at Quest, which we know those little Quest bars.
And he’s also now on his latest entrepreneurial venture. Legendary Foods, as Chirag mentioned, great products over there, and I got a story about Bruce, so Bruce, yeah, this is a good one, so we’ll get it kicked off. So, the first time I met Bruce, and let me tell you what a fan I am of the Legendary Products, I’m going into a studio in Brentwood, and I’m going to film some interviews, do some of this stuff.
And the, the producer comes out to me and says, Adam, I got something for you to try. And I’m like, what do you got for me? He’s like, here, try this. And he brings out a legendary, like, bar, like the Little Cakes. And I’m like, ah, I brought my own. And he’s like, what do you mean? And I’m like, legendary keeps me alive when I’m traveling, when I’m doing things.
Like, it keeps me alive. He didn’t believe me. I was like, oh, so I opened up , my briefcase and I’m like, my little bag. And I’m like, look, it’s chocolate. You don’t even have chocolate here today. And I, he’s like. White is a ghost. Then Bruce comes out and he’s like, he’s like, Bruce is all confused. Like, who is this guy?
First of all, I’ve never seen you. I don’t know what you’re talking about. He comes up and he’s like, I’m showing him this legendary bar and he’s like, wait a minute. So when I see what Bruce is doing at Legendary, I’m amazed. I think it’s amazing. And I’m interested to know the story. So. Transition from Quest at some point and then deciding to launch your own brand and to go on that entrepreneurial pursuit.
Talk to us about it. Are we good? Can you hear me? Okay, great. Yeah, so, so the Quest journey was phenomenal and we hit a peak of, believe it or not, 440 million in five years. It doesn’t mean we didn’t have our stumbles. We did some really crazy things when we were making, a lot of times brands make so much money, they start doing things that are not relevant to getting product in people’s hands, which is really the basic for any consumer product you have.
But regardless, we sold Quest to Atkins Nutrition after seven years total for a billion dollars. Not just a billion dollars, but a billion dollars cash, which is, you know, business as a unicorn. And trivial thing. There’s only been 1100 billion dollar companies in the entire world. So very few have sold for cash.
But regardless of that. Ron, our chairman, had this idea a year before we sold Quest. We went to the investment firm and said, We want to start this seasoned nuts and nut butter company. And they’re like, yeah, sure, no big deal. It’s no threat to us. We started that actually a year before we sold Quest, and then once we sold Quest, we went, we all exited, and it was great, and we all went full forward with Legendary.
And then the Pastries came out about three years into it. And the Pastries, you know what I, we call a Legendary Quest 2. 0 internally. All the mistakes we learned at, at Quest, we keep things lean and mean. It’s all about getting products into people’s hands. We’re not going to do any crazy shit Super Bowl commercials or music videos.
It’s all about getting products into people’s hands. And that’s going to be the key to our success. But right now we have pastries, sweet rolls, and chips. So we have some crazy things coming up for next year. That’s amazing. All right, so Costco. I want to talk about the early days just a little bit here.
So Costco, when I think about the gas stations, when I was reading up on your bio and I’m looking at this, I’m like, I spent an enormous amount of time in Costco gas stations. And the reason is because when I was in college, I was one of those armored car carriers that, you know, the guys that go pick up the cash and all of that.
This is before Uber. So you had to make a living and, you know, figure out how you’re paying for college. So I went, I mean, I’d work on the weekends and I would be. Costco gas stations they were one of my our best clients and all day long I’m going from Costco to Costco all through all of Michigan so broad question what was the magic in unveiling some of these things and opening something like gas stations and otherwise at Costco what made that work and I’ll tell you the employees there like unlike anything else wearing the badges They’ve been there forever.
And I, and at that point I’d seen pretty much every retailer. Like what, what was the magic there? So whether it’s gas stations or some of the vertically integrated food manufacturing businesses, any, any business from Costco, it was less about, okay,
the company can make a lot of money getting into that business. It was more about. If getting into a business delivered disproportionate value to Costco’s members, because then it allowed Costco to raise the price of its membership. Because if you cut through all the noise, Costco makes all its money on membership.
And the little bit of margin it takes, just fingers crossed. So, you could come up with an idea for something that would sell a billion dollars and make the company worth a billion dollars and if it didn’t deliver disproportionate value and align with the company’s strategy, it’s a no. So, the magic with GAS was looking at, it was actually very simple when you cut through it all, that Costco owned their own land, so there’s a big sub cost they don’t have to pay.
They had,
Excessively large parking lots. We didn’t need branded gas because people trusted the cost of it. We didn’t need labor because you had pit pump technology in the right place at the time. And so you start going through all these things and you can start eliminating a lot of cost. And you put on top of it the fact that even though you had to make a profit, That wasn’t the key.
The key was, in Costco, the surveys of the members showed that they shopped, at that time, every two weeks. Sorry, every three weeks. And so the feeling was, if gas brought them back into the store more often, you had more shopping frequency, and you had this 100 million revenue store, that if you increased the pop store sales a few points on 100 million, that’s a lot.
And it actually ended up Increasing the shopper frequency from like every three weeks to like almost two, two and a half. It increased sales inside the store by three or four points. But again, if you’re 100, 150 million revenue, that’s a lot of income over revenue. And so, it drove the value of the membership.
And so the biggest The biggest whiff of the whole thing was, I made the assumption that no one in their right mind would wait more than three cars
deep for a tank of gas. And, we’ll be wrong. You were also wrong in the statement, excessively large parking lots. Not anymore. I don’t know if I agree on that one. They’re big, but it’s still, depending where you’re at, I’m running around looking for a spot. So. During this time, or maybe not during this exact time, but at some point, so both of you in your careers had this point of being entrepreneurs, whether you working within Costco’s confines or whether yourself Bruce working at Quest, taking that entrepreneurial leap.
Like, what was that like? Whoever would like to start, either. I use the word intrapreneur, so when I originally started helping The team, and it was early on, you know, I was the least qualified person to work at a nutrition company. I was a cop and then a bodyguard. I met Shannon in the gym and we became fast friends and I started getting products in celebrities hands.
Just because they were cool people. When I started helping them, I started to kind of fall in love with their passion, what they were doing. It became much more of a protein bar company. We became a mission based company, transforming lives. But I remember early on and on, I said, listen Bruce, We have 99 problems here, and he still says it to this day, we have 99 problems, just help get problems off my plate.
And I just did what I do, get building relationships, get in front of people’s hands, but I just started taking things on and building out the events department, the ambassador program, and, and I became an entrepreneur because I really had no No rails. It wasn’t like I had a job description, per se, right?
Because, because my mom was in charge of R& D and Mike was in charge of finance. So, everyone had their responsibilities and they never really called, rangled me in. So, I really, I think everyone can be an intrapreneur inside their company, even if you might be a W2 employee. It doesn’t matter how far you want to push the limits.
So what’s it like to make the jump then? Now you go from entrepreneur to your own company with Legendary. Well, I, still part of the team. I’m, not the owner. But and I own business. You know, I just realized it’s interesting. Everyone wants to be an entrepreneur. They think you do.
But then they go from working 40 hours a week to working 80 hours a week. And we still answer to people. One thing I’ve figured out in life, if you’re in the customer service business, you’re always answering to people. Even Elon Musk, as crazy as he is, you’re always answering to people. And you have a board of directors, so it doesn’t matter how successful you are, you still, you know, are it.
Yeah, for sure. For sure. Pat, same thing. In, in my case you know, I launched three different businesses in Costco, but we ended up evaluating about two dozen. Most of them just never made it to the finish line of launching
for various reasons. And really that caused me to get kind Some of these businesses became pretty successful, but, you know, in a large company, you can create a billion dollar business, and your reward is, mine was, a 25, 000 raise, a title change, and an Atta Boy, and I realized, that’s not participation, and if I wanted to participate, I had to take the risk, and so, It was probably the most difficult career decision of my life because Costco is an amazing company with wonderful people, and I have friends to this day but I knew I had to take the leap, and so I did, and it was really an opportunity not just to participate and do it on my own, but also take a lot of ideas where I’d see, hey, everybody does it this way, why isn’t anyone trying this?
And be able to, you know, realize some of your own thoughts, You know, ideas and thoughts. There’s a lot of entrepreneurs in the audience. You guys have all done as well. But the biggest change for me, it was the biggest shock, was having to manage my own balance sheet. When you’re working for a large company, If your project gets approved, the checks just get rid of you.
You gotta meet your budget, or you’re fired, but you don’t worry about where the money comes from. When it’s your company, you’re spending a disproportionate amount of time
wondering where the money’s coming from. Great answer, yeah. Any entrepreneurs in here? Do we want, yeah, there we go. So, everybody feels that one, I’m sure. Two things that you both mentioned in your own ways. Staying on brand, whether it’s with what you’re doing at Costco, whether it was Popchips or otherwise Bruce, whether it’s like you mentioning not, you’re going to go out, you’re going to get product in people’s hand, hands.
What does that mean to you? Staying on brand with your mission and what you’re, what you’re doing? So I believe every, if you get a thousand screaming fans, that’s your key to become a million dollar company. And this has nothing to do with social media. I say it like this. If people like you, they’re going to listen.
If they trust you, they’re going to buy, but if you transform their lives, they’re going to go to the highest mountaintops and scream your name. And that’s exactly what happened to Quest. People would write us and say, I’ve got diabetes, my blood sugar goes down. I’ve got celiac disease. I’m eating product.
I’ve lost 30 pounds in the last five months. So when you get that kind of momentum.
So probably the best example I can give of being our brand is is my experience at Popchips. We knew that if we didn’t create a culture, the employees would create a culture for us and we’re not going to like what they create. So, we created something called the Principles of to be the brand, but then there are actions you take to live the brand.
It was everything from you know, how you conduct yourself, to being generous, sharing product samples. You know, Bruce passed the test, he showed up to the event with samples. You know, I did the same. And you want everyone to embody the brand, so there’s no confusion about that, and then that starts translating into the communication, the messaging and the consumer’s perception.
And ultimately, it became a major factor in how we interviewed and retained people. If they couldn’t live those principles, it didn’t matter how smart she or he was, we couldn’t work it. And I will add to that, because it was a culture at Quest. It was, it became a movement. If you, and if you saw my Jeep parked out front, it’s wrapped in Legendary.
Boss of my old marketing guy at Quest. I wore I wore Quest apparel seven days a week. As a matter of fact, if I would go on a date, I’d have a nice button up shirt that still said Quest. So, that’s all about representing your brand, and that’s what we created at Quest. Everyone wanted to wear our apparel, everyone wanted to be part of this culty kind of cool club, and it really became a movement more so than just a broking bar.
So, Pat, for those marketing consumer products, like, talk about the distribution landscape, and maybe how some things have changed in the years. Things have changed a lot. You know, from, from what I mean, just using kind of a gross measure of change, the pandemic, you know, changed a lot of things. Not that the pandemic itself changed it, but since the pandemic began a couple big things that if you’re, whether it’s food or non food, you’re selling through consumer channels versus the retailers.
There used to be, pre pandemic, a lot of what I call cash You know, where you can go into that retailer without high slotting fees, without a big cost to promote, other than the cost of, you know, the promotion itself. If you’re a natural or organic product, Whole Foods is a great example, right? And you go into those cash flow friendly retailers, start building your data story, and then use that to get into bigger retail banks.
Well, fast forward to You know, since the middle of the pandemic, and that’s all
changed. You know, you’ve got cash flow failure, they’re charging somebody. Whole Foods charges massive fees just to promote. So if you’re gonna cost a promotion, you’re gonna pay like 20
grand just to set up a promotion for one more. You start multiplying that by these other retailers. It’s just, it requires a lot more count. The other thing is the investor landscape, which many of you know. You know, it’s completely changed.
You know, the kind of free flowing money for, don’t worry, don’t look over here at the bottom line, look at the top line, we’re growing. That doesn’t really exist anymore in the consumer space. Investors want to see
Small losses in the beginning, clear path to profitability, and much more of an emphasis on margins. So,
you’re getting pressured on, limited capital, pressure to turn a profit, and yet the retail landscape is becoming much more expensive to operate in. So, what does that mean? You know, for a lot of the companies that I work with, it means, number one, You have to be incredibly thoughtful about your distribution strategy in picking and choosing more carefully to build that data story that starts to say, look, we’re winning, though, you know, what channels of trade, what geography, what retailers within those channels of geography and also have, you know, a sufficient amount of capital.
It takes more capital than it did. Frankly, when I was doing pod trips in the early 2000s probably the biggest change I’ve seen over those two years. And Bruce, I know where I get my I know where I get my legendary, Target, USC, that’s where I’m going. Anything, anything in distribution that you noticed that changed in, in your project?
Yeah, yeah, for sure. I mean, I think you mentioned already, COVID definitely changed the world. I mean I think every single person I only shopped online. And I don’t think retail has ever really recovered completely. I think a lot of people have been, you know, comfortable shopping online. And I’m still, I love going to griffin motor stores.
I love supporting them. But sadly, you see them closing. And early on at Quest, you know, GNC was our largest partner. Oh wow. Like at 30 million dollars a year. I don’t think they’d probably do 30 million a year. It’s a whole company they own. I mean, they’re struggling. So, the landscape’s obviously changed.
The distribution’s changed. And a lot of people, a lot of my friends that start small companies, are all direct to consumer now. They just want to stick on their website, nail it out, see how it goes, before they even put their toe in the retail, because retail’s much tougher. You gotta fight for, for space, and And the unique thing about a lot of my friends, like, Oh, I made it to Target.
I made it to Walmart. It’s great to get on the shelf, but you gotta make sure that stuff gets off the shelf. Because it’s really cool. You can tell all your friends, I’m on the shelf at Target. And what happened? They kicked me off because I wasn’t moving it. So sometimes it’s okay to be a direct consumer.
And you can probably get wealthy directly. Maybe you never need to go to retail. We’re just bringing up a great point. There’s a number of brands I see now that start off direct to consumer. They threw out their pricing, they understand the customer demographic, and then they might be, call it, 10 to 30 million sales, somewhere in that size.
Where they then make the decision if they want to do retail, and then it’s a much more successful transition because they’re able to go to the retailer and say, I know who’s going to buy my product better than you do, Mr. Retailer, and these are the shoes you need to bring in for this reason. And they’ve got, you know, kind of the data to back it up on the e commerce side.
So, I couldn’t agree more. That’s important. You already have a proven track record. Here, look what I’ve done over the last three years. The cells, bring it to yourself here. Alright, for the audience, this is my last question and then have your, have your, this is your warning, have your questions ready. I want to see hands going like this when I say who has a question.
So, final question for both of you. So, one of the things that we’re, we focus on at Mission Matters is, personal brands, and building personal brands. I noticed in your career, Pat, if I think about whether it’s Costco, Popchips, what you’re doing advising boards for food companies or CPG companies. And then Bruce, as you mentioned, wearing the shirt seven days a week.
Driving the truck and, and always being branded with legendary. So open ended for both of you. What is creating a strong, identifiable, identifiable personal brand meant in your careers? Personal? Your brand. Yes. And I know that’s a big thing now. I still struggle with it. People say you got to have your own brand and I created my own brand a little reluctantly, to be honest, but I started in public speaking and I’ve done pictures and podcasts.
And now I, I guess I have the Bruce brand, which sounds kind of weird looking logistical, right? But, I have now been identified as Bruce, and as I’m writing a book and speaking in public. But, it’s still not comfortable for me, because I’d much rather represent Legendary and be known as the Legendary guy or the Quest guy.
For years, I just, I thought it was known. People see me in the gym, they don’t know my name. That’s a much better identity for me than being known as Bruce. Does that make sense? It does, but Bruce, you are a brand. I saw you, that last event I saw you had on that big, that big Yeah. You might not be comfortable with it.
You might not be comfortable with it, but you are a brand, Bruce, to be reckoned with. Yeah, I get your reticence to think of it as a brand, Bruce, because I have to, I have to admit, I cringed a little bit when I heard that, because I don’t think of it that way either, but I guess if I had to answer the question, it would be acting in your presence.
You know, in my case, over the years I’ve just seen a lot of if there’s private equity in the audience, I apologize in advance. A lot of entrepreneurs get taken advantage of by private equity, thinking they’re on the safe side of the table and not really realizing they really are. And being in a position to then help founders and entrepreneurs.
Scale their businesses to accomplish their goals as opposed to private equity goals, and that involves telling them the truth versus what they want to hear, and sometimes that results in somebody not wanting to work with you, and that’s okay. So, Acting into your, acting into your principles can lead to people being very clear on what they’re all about.
And that tends to lead to
