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I don’t remember how I made it to Laredo from Houston, but I do remember the grain-free tortillas that Miguel Garza handed me after he and I ran repeat miles in the South Texas heat. It was a silly ritual that I looked forward to whenever training with him. Miguel was finishing law school while running a family gym called G7 Athletics. The consummate athlete, I never once beat him in those repeat miles. He had a sneaky way of pulling away without making a fuss over it. This skill would play to his advantage in the years to come.
I’d known the Garza family for three years by the time I was introduced to their tortilla recipe. Then, I’d viewed them as over-qualified warehouse gym owners. In 2019, they’d go on to raise $90 million from Stripes, a prominent private equity firm. That tortilla chip brand was officially five years incorporated and bootstrapped by then. The “G7” moniker had been retired for something more authentic to the family’s heritage. The gym was closed. And Siete Foods was on every Whole Foods shelf in America. Miguel is a co-founder of a brand that is on it way to a $1 billion valuation. The product that was passed around to friends and family after long runs and training sessions has become a snack food craze.
Garza is in full-on expansion mode, as he plans for Siete to become a billion-dollar brand. This month, the products debut nationwide at Target for the first time, in more than 1,600 stores. Siete will also significantly expand to 3,000 more Walmart stores and another 750 Kroger stores. By the end of the year, Siete will be found in more than 13,300 stores. 
A few days after I was first introduced to the Garzas’ prized family recipe, I flew to San Francisco to visit with Kelly Starrett, a friend and expert in mobility. He and his wife are co-owners of a prestigious gym where many top athletes train. This particular day, a Silicon Valley executive was discussing his fascination with buttered coffee across the room. I chuckled, just as I’d done with Garza’s tortillas several years prior. My spider sense for brand, opportunity, and trajectory hadn’t formed by then. Dave Asprey went on to raise a small round of seed capital in 2014 after bio-hacking himself with his Tibet-inspired derivative of Yak Butter tea. He used the $2.5 million to professionalize his approach to consumer packaged goods production and fulfillment. That company is now known as Bulletproof 360. Like Siete Foods, you can find a dozen or more SKUs throughout Whole Foods.
Listen to the introduction of Polymathic Audio and you’ll hear the voice of Jeni’s Splendid Ice Creams founder explaining the inputs that influenced one of the most beloved consumer goods in this modern era of grocery. The story of Jeni’s is similar to the first two, though I wasn’t around for its genesis. When I first met Jeni Britton Bauer, our daughters were in school together. This was early 2013 and Jeni’s had yet to become a household brand loved by celebrities, politicians, and high-profile athletes. I’d go on to meet the CEO of the brand a short time after meeting Jeni and her husband (backstory here).There are elements that each of these products share. While each represented a manufactured good, the brands were far from manufactured.
If you leave the traditional direct-to-consumer scene of New York and Los Angeles and observe the pattern set by the brands formed in the earlier 2000s, you will identify markers that influence brand viability and the likelihood of “enterprise scale.” In many cases, the founders were the brand and the scale was byproduct of their devotion to it.
Eventually, the funding came and the authenticity of it scaled effectively. In the process, the design improved. eCommerce footprint improved with it. In many cases, the Instagram handles evolved from speaking to local audiences to communicating to national ones. And more Whole Foods, Target stores, and even Walmart stores featured their products. The process to get there seems archaic by today’s standards. In May 2019’s The DTC Playbook is a Trap, I explained:
I am bearish on many of today’s DNVBs. Brands are merely following the paths of the brands before them and I believe that it hinders more than helps. Their paths to their early-stage milestones are often unproven anecdotes written by investors who’ve likely never sold a physical product. [2PM, 1]
Many of today’s processes are inverted. This is the basis of a scathing piece by Bloomberg Opinion that posed the question: “Why do disruptive startups slavishly follow an identikit formula of business model, look and feel, and tone of voice?” The author of the piece left us with this hard-to-forget imagery:
The one liberal value blands tend to elide is inequality, because while blands are, by definition, not opulent, neither are they bargain-basement. For the rich, blands are an ironic normcore trifle; for the aspiring middle, blands offer a fleeting facsimile of prosperity; and for the poor, blands are either the products they make, or the services they provide. [Bloomberg, 3]
The column featured a who’s who of venture-backed consumer goods, many of whom share similar traits. Unlike the product innovators cited above, this category of digitally-native brands most often featured superficially manufactured brands. This is the result of a DTC Industrial Complex that sprang to life following an historic influx of early-stage venture capital. I raised this in 2018:
If there is a concern, it’s that the practice of launching a DNVB has ambitious founders shifting resources from within the company walls to outside of them. Brands can outsource product engineering, the brand message, the media relationships, and the customer acquisition. All while ignoring the benefits of the “product’s first 100” for day one, hockey stick-like growth: a strategy that has worked for Warby Parker, Harry’s, Away but very few others. A strategy that is often fueled by that pesky abundance of early stage capital. [2PM, 2]
More often, the brands mentioned in this Bloomberg column were products of an industrial complex that accomplished a great deal for the industry. The system of creative agencies, high powered public relations firms, development partners, and accessible technologies helped to forge a rewriting of how brands grow. Unlike Siete Foods, Jeni’s Splendid Ice Creams, or Bulletproof 360, many of these brands were built before a single product shipped. The narratives were packaged neatly, ready for press release.
The direct-to-consumer (DTC) industry will continue with this ‘blanding’ strategy, one that has produced just 42 exits in its era. With more early-stage venture capital than ever, agencies will continue to make themselves available to resource-rich brand founders. But if brands truly want to relinquish themselves of a collective groan or piercing analysis of their sameness, they will have to look towards those CPG brands and retailers that were built with soul, authenticity, and intent. These are the ones that started in the parking lots of gyms, at school fairs, or at local food stands. They mastered products before they mastered message or organizational efficiency.
There are a number of early-stage DTC brands that have set aside normcore trifle for the behaviors that made brands widely appealing and (seemingly) infinitely scalable. They are optimizing for modern design and traditional distribution. These are the brand stories that remind me of Miguel’s, Dave’s, and Jeni’s.
Grocery is the leading category in American eCommerce. The biggest DTC successes are the brands that are equipped to scale with those channels. The future of the CPG industry will look more like the past, before the post 2007 era of early-stage dilutive capital. This is how brands beat “bland,” they build for early-stage sustainability and later-stage growth capital Back then, CPG companies were built to leverage wholesale retail. This time, it’s digital. The winners will take the lessons of the past with those of the present day. Build with authenticity in mind. Let the spoils of industry come later.
Report by Web Smith | Editor: Hilary Milnes | Art: Alex Remy | About 2PM