I think it would be my dream to always use the highest quality ingredients. I'd love to use like old ugly shallots that nobody wants and the bad tomatoes and like make something beautiful from waste. And that's my aspiration. And that business model led down a very, very expensive path and I think is achievable at massive scale. But we're just not there yet.
Wait. Say more about that.
Basically that is sort of the issue with CPG in general. And if you want to make a small mom and pop like locally sourced, like beautifully made, responsibly pay your workers excellent wages and it's going to be like a $38 jar of tomato sauce. And it's going to be a very limited market of people that are willing to pay for that. And, you know, I look at my local grocery store and the first thing I do is I go to the tomato sauce aisle. I'm just like, got to know what's going on over there. But you see Rao's and Carbone on the same eye level and additional merchandising behind you. And they are both on sale for $8.99, and that's a 32 ounce jar. Our jars are 16oz. And you know, $12.99 or $12 retail.
Hello, and welcome to another episode of the Odd Lots podcast. I'm Joe Weisenthal.
So, Tracy, we're recording this on February 4th, and a lot of tech stocks have been getting clobbered lately. But you know what's doing really well? Companies that make consumer staples, all of like the core staples that you'd see in your pantry, etc., like your Pepsi Cola and all this stuff. Companies that might make like jarred sauces and stuff, people are returning to sort of the old style basics that people buy in the stock market.
Who would have thought that food is Lindy? Amazing. Food persists. Nobody's selling. You know, it's like the only place to hide right now on the market. Like, I look at my screen and everything is bright red, and the only thing that people feel comfortable betting on right now seems to basically be food. Pasta sauce and the stuff that people have eaten for all time and probably will be eating for as long as there are people on earth, right? And this always.
So I find this business really interesting because, you know, I joke that food is Lindy in many ways, but, you know, like food is right. Food is essential, but it's also constantly changing.
And so I'm always very curious about how consumer brands actually make pricing decisions, branding decisions, especially because it also feels like an area that's very crowded. You know, you walk into the supermarket and there's like 20 different brands of, I don't know, flour or something.
You know, one of the things, you know, we've done various CPG episodes over the years and we did some episodes about like Celsius energy drink and stuff. And one of the themes that we sort of maybe I hadn't appreciated prior is like that competition for shelf space.
Yeah, the distribution aspect, getting on the shelf, getting a spot in the truck that delivers the beverages to the grocery store or to the bodega or whatever, like so much of the game is. Yes, the brand. Yes, the product. And then just the sort of logistical aspects of it.
And I think like that, that sort of we don't talk about it enough, but as a theme, I love like learning about this space, how the CPG business works, because it just to your point, especially with regards to pricing and so forth, it's so illuminating about how the whole economy works.
Is that a word? Illuminating? Illuminating? Yeah. Very good.
Well, we do have the perfect guest. I'm very excited to say we do have the perfect guest today, someone who is in the tomato sauce business but really known for so much more. One of the, I would say, most famous people in the food world these days, we are going to be speaking with Alison Roman. She's a cook and an author. She has a grocery store called First Bloom that I missed when they had a pop-up Manhattan location. I missed it. Hopefully, you know, that'll get reopened at some point. And a tomato sauce business called A Very Good Tomato Sauce. So Alison, thank you so much for coming on Odd Lots.
Oh, thank you for having me. This is a pleasure. Where to begin?
You are a genuine celebrity of the food world. People are addicted, and they love your recipes. I just at home two nights ago, my wife made your, I think it was like a broccoli cheddar soup that you have a recipe for.
Yeah, that's a deep dish. That is a deep cut.
That's cool. I've had your famous chickpeas too.
Yeah, that went viral. We've had multiple recipes go viral.
But how did you decide to get into, why a tomato sauce?
I think I, well, I got my start working in professional kitchens and I worked in editorial, and then I sort of went off on my own writing books and doing miscellaneous things. And my whole career as sort of a recipe writer, cookbook author has been teaching you how to cook and being like, why would you buy anything when you can make it yourself? You know, as the person whose pantry is lined with like ingredients rather than, you know, things. So it's funny that I got into the tomato sauce business because I've written recipes for tomato sauce, and I'm very proud of mine, and I think it's delicious and easy to make and anyone can do it. And then the older I got and I married a man who does not cook. I had a baby. The baby does not cook yet either, unfortunately. I needed to eat more. I needed someone to cook for me and it just became sort of this question I had of like, why am I so allergic to the tomato sauces on the market? Why am I not embracing of the things that are currently available? And I realized it's because I'm, well, a very picky, probably very snobby. See, I just was sort of, you know, like, I do want to make it myself. I do want to sort of control here. So I made it myself. And when I had opened the grocery store First Bloom, I decided to start including it as like a line of things that we would keep in the freezer: chicken broth, beans, tomato sauce, things that we would make in the store to sell to people at the market. And very soon the demand exceeded supply. And I, you know, for all the things that I do, I did not want to be full time making tomato sauce. There was just, I didn't have the equipment, I didn't have the time. And so I was approached by somebody who is in the tomato sauce making business. And she was like, why don't you just outsource it and have somebody make your recipe? And I was like, well, how is that going to work? You know, like how? But won't people know the difference and how could it possibly scale? And through a lot of trial and error, I figured out we can scale it.
I definitely want to ask about scaling up, but before we do, were you daunted at all by doing tomato sauce specifically because this seems to be an area where there is a lot of competition, especially between, I can think of two like big players, which will be Rao's and Carbone. Right? What are those, cheap stuff? And I guess those aren't the competitors. Yeah, I bought the Carbone things once, which probably maybe says something about it. But anyway, how do you differentiate your product from, you know, those names with very, very strong branding and customer recognition?
Yeah, I think it's an interesting thing because sometimes, often people start a business saying what doesn't exist. There's a hole in the market, I'm going to fill it. And obviously tomato sauce. There are many brands constantly fighting for sale price and shelf space. But there wasn't a tomato sauce like mine and there wasn't. I find that most tomato sauce on the market, especially the popular ones, Rao's, Carbone, etc., are more marinara in style. They are, you know, more uniform in texture. They are sweeter. They tend to have oregano. There's just like a specific vibe that they're going for. And I think to me, sort of modeled after the like old school Progresso, which is what my mom grew up on. And that's what I ate. And I think that that was sort of the gold standard. And people kind of went down that path. And it's interesting because we talk about Carbone as like the, you know, top two, they're not very old. Yeah. And so in our consciousness like, oh, well that's the top two. Well they've only been the top two for as long as they've been around which somebody can fact check. But I believe it's only a few years.
Yeah, I think that's right. Yeah.
So it's not like this legacy brand that I'm competing with. It's just another company with name recognition, a lot of financial backing and strong branding. And I also noticed that all the tomato sauces were sort of like chef focused and male dominated energy. It was sort of like a chef, a guy, a bro, a person's name. That was a guy. And I don't know, I just was sort of like, I want to do something totally different, even if it's tomato sauce, I don't think they're all created equal. And so with everything I do, I genuinely try to ask myself, does this already exist? And if not, then I want to make it.
I have some thoughts about chef bro energy, but I'm going to save them for after the plug.
No, I'm going to save them for after the episode. Let's talk about, I mean, I want to talk about the entire, from your conception in your mind to the end consumer, the whole supply chain. So I want to like really break it down and understand it. But let's start with like, how do you scale up a recipe? Because quality control, you have some recipe that you make in your kitchen and you really like it, etc. But then there's, you know, but then making it in large batches, totally different game and then you're not there to supervise it all the time. Talk to us a little bit about that process, how just how that even works, such that a recipe that you make at home can be done by someone else at a different facility in volume, and it's still the same recipe.
Yeah, I think that you have to consider, you know, there's a lot of knowledge that goes into it of like your knowledge of cooking and how ingredients, you know, they're not a one for one. You can't just multiply it by ten and be like, this is going to be the same thing. Also, the equipment is different. How they're doing things are different. We have three flavors. We have a garlicky tomato, which is sort of your classic, a spicy fennel, which is spicy and has fennel as advertised. And then a caramelized shallot anchovy, which is modeled after the shallot pasta, which went viral during the, I think we all at one point probably made it. If I have no fans, the shallot pasta will still have a million. It is more famous than I am for sure. And that was the trickiest one to nail because the caramelizing of the shallots, the addition of anchovies. Yeah. I ended up having to go back three times after we had jarred the first batch and adjust the recipe, which I didn't have to do at the end with the others. But because shallots, when you caramelize at a large scale, they tend to get soft and jammy and very sweet, which increases the sweetness perception of the final product. We ended up switching to a different method of cooking the shallots. I ended up reducing the amount entirely, cooking them further. Like it? The whole thing had to change as soon as we started getting to the batch size. And each co-packer is different. So I think, you know, an issue, we can, we'll get there. But if you talk about scaling, each co-packer is going to handle things differently. And right now we're with a pretty small co-packer, which I like because I can visit them from my apartment. They're in Industry City, Brooklyn, and I go there and I can taste the batches. I can say, okay, we multiplied the chili flake in this recipe and now it's way too spicy. So we're actually going to cut it by half, which it seems to stand to reason that that would be not nearly as spicy, but because of the way the ingredients behave, it is, you know, so stuff like that where you're sort of in the lab, as it were, tweaking as it goes. And I think that the more I explore the CPG world, that is the biggest challenge of you can't just send a recipe in and hope for the best. Like, you really have to be tweaking and adjusting at scale.
How big is the tomato sauce making operation right now? Like in people?
Two people? So it's like, it's relatively small.
Yes. They have big massive kettles. And I think that also when you think of like, why tomato sauce. Like I just, I kind of knew that getting there would maybe be the path of least resistance and that I'm not inventing something from scratch or not, you know, requiring equipment that nobody has. Like these are kettles that you can make many different things in. And so co-packers are a bit easier to find. These particular co-packers specialize in tomato sauce. And most that I've encountered do. And that's like what they do. And so they are, you know, well informed.
I'm sorry, I might ask just a lot of like really remedial questions about this.
So let's go deep. The kitchen, the two person kitchen where they're making, that is a separate facility than the co-packer? Or is it the same entity?
It's the same entity. Okay. So we have the place, the warehouse where the tomato sauce gets made. They get the jars and they sterilize the jars. They make the sauce, they batch the sauce, they put them in the boxes. The boxes then get shipped to a third party logistics warehouse, which is actually not far from where the tomato sauce is made. So we cut down on shipping a bit. And that is where the tomato sauce comes from when you order it online, because right now we do have it in store up in the upstate grocery store. But for a few reasons, which we can also get into, we are just DTC.
Got it. Yeah. And then again, maybe very obvious question when it comes to, you know, maybe at some point you grow and it'll be ten people, etc. In the food industry, are there chefs whose job is more or less to specialize in cooking at scale, that basically it's like, okay, someone has an idea for a tomato sauce like you, you know, you can't be there every day. Are there people who have professionalized the art of scaling up a recipe for volume?
I mean, I've never heard of that job specifically, but I mean, the guy who makes the tomato sauce for us, that is his primary. I mean, he was a chef, you know, did a lot of catering, a private chef, etc. And then I think to understand how to make things at scale, you do have, it's a lot of trial and error. You have to like understand it from a different perspective. But even working in restaurants, I experienced this because you take recipes built for a home cook, especially say baking. You're going to make biscuits for a restaurant. You take a recipe that you like from somebody's cookbook. What? I don't know. And you're like, okay, well, now I have to make these biscuits for, I have to make 200 of them a day. I'm not making 60. Yeah, and you cannot just multiply that recipe ever. And so I had a bit of experience in the baking world working at scale because you're never making 16 of something in a pastry kitchen. You're making 200. And so you kind of understand and also conversely, working at the bottom of Test Kitchen, when I first started working there, we were doing a lot more chef driven recipes. And when you work in a professional kitchen, you're making sauce. You're making 16 quarts of sauce, you're not making two cups of sauce. So the sort of reverse engineering that understanding that it's the same thing. The ingredients ebb and flow even if you're decreasing. So it's just kind of having that knowledge ahead of time. But I think that's how those people find themselves as a co-packer. And as we look into other products to make, it's like, okay, well, these guys specialize in baked goods. These guys specialize in granola. These guys, you know, and that's what they do. So they know.
How did you go about finding suppliers because, you know, I imagine you have some connection with your grocery store to, you know, farmers maybe. But if you're doing it at scale or a larger scale than previously, how do you actually find someone who's going to provide you with a steady supply of tomatoes or a steady supply of shallots and anchovies, I guess?
Yeah, we use canned tomatoes. In the summer we will do limited edition quantities of things like, you know, bruised tomatoes, SunGold tomatoes, like more in-season fresh stuff. But because tomatoes are so seasonal and I also believe the best tomato sauce does come from canned tomatoes, that isn't an issue, but it really is. I had worked with this woman, Isabel, who had more experience in CPG, and we sort of figured it out together with my chief of staff, Nani. And it was kind of the three of us looking at numbers and saying, like, who's located where? What is the shipping going to cost? What tomatoes are they using, what tomatoes can they get? What is their capacity like? How quickly can we grow here? And so all of those things come into factor because honestly, the type of shallots you're using at that scale doesn't really matter. I think it would be my dream to always use the highest quality ingredients. I'd love to use like old ugly shallots that nobody wants and the bad tomatoes and like make something beautiful from waste. And that's my aspiration. And that business model led down a very, very expensive path and I think is achievable at massive scale. But we're just not there yet.
Wait. Say more about that.
Basically, that is sort of the issue with CPG in general. And if you want to make a small mom and pop, like locally sourced, like beautifully made, responsibly pay your workers excellent wages, and it's going to be like a $38 jar of tomato sauce. And it's going to be a very limited market of people that are willing to pay for that. And, you know, I look at my local grocery store and the first thing I do is I go to the tomato sauce aisle. I'm just like, got to know what's going on over there. But you see Rao's and Carbone on the same eye level and additional merchandising behind you. And they are both on sale for $8.99, and that's a 32 ounce jar. Our jars are 16oz and, you know, $12.99 or $12 retail.
Joe, I'm going to betray my elder millennial status, but I'm thinking of that Friends episode where Monica starts making jam and selling it, and then she realizes that, like, in order to break even, it has to be $17 per jar, which was a lot back then. There was a lot. Who else made jam? And me, I don't know. Yeah. Tell us about your jam.
I mean, that was a million years ago when I first moved to New York, and I was working at Milk Bar at the time and used their commissary kitchen to sort of decide I was going to make jam and sell it at the Williamsburg Smorgasburg. And yeah, when it first launched and say, oh yeah, baby. And, you know, handwriting each label, like getting beautiful jars, which cost $4 a piece, like the economics were so poor I didn't care. I wanted to do it anyway. And as long as we could make more money to buy more jars and then make more jam, obviously that was not sustainable. It didn't last for very long, maybe a year and a half. But same concept where, okay, in order to get this actually done and to actually turn a profit, you're like, okay, well that's why people go for the jugular immediately and seek out, you know, investment and say, we need to be on target to launch. Let's do a business scale.
Yeah. One of my favorite books I've read is the autobiography of the Nike founder, Phil Knight. Shoe Dog. And he talks a lot about, you know, they started small with sneakers. And then there was, you know, this sort of jump where it's like he had the opportunity to get a lot bigger. Banks didn't really want to give him loans because it seemed dicey. It wasn't like a VC style business, but he clearly needed capital to sort of take it to the next level, like bigger factories, etc. Talk to us a little bit about like financial scaling and the risks that involved with like, okay, one day you don't want it to just be two people in a kitchen. You had to be 20 people or 200 people in the kitchen. Well, that requires a lot of upfront costs and new warehouses. Maybe talk to us about how you're thinking about that or what you've seen on the landscape in terms of your options.
Yeah, I mean, it seems like what you're fed in terms of like the media coverage of brands and you're like, oh, this brand has $3 million out the gate and this brand has six months. And that doesn't mean that brand can succeed. That doesn't mean that that brand isn't going in the hole because they have to pay that back.
Yes. Multiple times over before the founder sees a penny of it.
Exactly. And it also means that there's a lot of pressure to increase SKUs and marketing and it's a, to me, a very overwhelming landscape that is not rooted in authenticity or something being good. And that, to me is always going to be the most important thing that I do. I also want to do it intelligently and make sure that it's not like a financial crazy firestorm. But I think that right now, literally today, after this, I'm going to a few meetings, but I am right in the thick of it, of figuring out the answer to that question of like, who do I hire? How do I hire them? At what level? Who is going to actually help me? Basically my desire is to hire somebody, two people, three people who are excellent at what they do. I am not a business person. I am a tomato sauce person. I make tomato sauce and I make really good tomato sauce. I don't know how to do these other things. And what I do know is that I'm not trying to scale up at such an intense rate that it sacrifices the quality or the integrity, or puts me in a position to grow the business faster than I want to. And, you know, I think it's interesting because a lot of times people start businesses, especially in the food CPG world, where the immediate thought is before they've even made the product, how do I sell it? Like, how do I, what's my exit? Okay. In six years, we could, you know, it's like what happened to just making a great product that people are really into. And I think I have the luxury of having 42 other jobs. And so, you know, I'm a writer, I do video, I make cookbooks, and I think that knowing that this isn't my primary, you know, the one thing that I'm betting on, but I do think that there's a sort of credibility that's been lost in developing products and I think that people are going to start to want that. And I think that they're going to be like, well, why would I buy this person's tomatoes? I was like, because I'm seeing it everywhere, or this one because I trust it, that it comes from a good place.
What kind of lenders or investors do you actually talk to for this sort of thing? Is it like VC?
I don't yet, but that would ostensibly be it. I think that for me personally, I've self-funded every project I've ever done and I've kind of taken this to its maximum in that I'm not that in the red and I will be whole probably by the end of the year, which is great. It's more that I want to be sure if I'm going to ask for money, I want to ask for money from people that understand me and are not expecting me to be someone else, or model my business off after those other ones that they see as being successful. And I say that today. Ask me next year and I might be in a different position, but I think it's sort of, you know, a friends and family round style. Or one main investor who sort of sees me, sees the goal and is like, I want to be the lead and I want to be sort of the primary.
Do you have to bring like actual jars of the sauce when you meet with investors? I know you haven't done it yet, but I'm really curious if you have a food company, is that a requirement or are people just looking at the numbers and the branding and the distribution network?
I think it could help. I think that if you are a lesser known quantity, that's probably a must. I would, I mean, I'd want you to know what I'm selling you and why you should invest in it. It's giving Shark Tank. Yeah. But I think for me, I've been very fortunate that I've already sort of been approached by people that are like, I like what you do. I like everything that you do. Everything you do works. And like, I have no reason to believe this would be any different, even though I do know, given the saturation of the market and how crowded it is, it is sort of, oh, why would you enter into what was effectively the most crowded, you know, market? But again, I see my contribution as being unique.
This might be sort of a sensitive question. You know, there is a, I think you have cult status within certain, among some people. We seem to be in an age where people with a certain level of cult status, they have these fans who like really just like, they want to buy something from you. They're excited to have the opportunity to do business with you. Yes, Taylor Swift's fans want her to make five different color vinyl versions of each album because they're really excited about it. And they'll buy each one. Yeah, and Donald Trump's fans really like want him to like, you know, make a vodka brand and whatever because they're excited about that. Buying Trump vodka, I know. Do you feel that, like do you feel that you have like a base that is enthusiastic about the prospect of essentially supporting you and like being part of your, you know, growing your world?
Yeah. I think that I am very fortunate to have been in this industry for as long as I have. And I think that with that comes a reputation and trust. And you cannot buy that trust and you cannot force it to happen over a short period of time. And I think that it is familiarity. But above all, people are like, I know this works, or I know when she recommends something, it is good. And so it stands to reason if I'm going to make, if I'm going to put my name behind something and like put my own money behind starting a company like this, it isn't a money grab, you know, it's not the most lucrative thing I do. It's a definite loss leader. But it's sort of for now anyway. But I think that there is a hopeful, I would imagine people would think if she's going to do this, I know it's going to be good. And I get a lot of feedback on the sales, people saying, I've never bought sauce in my life, but I am curious. Or it's people that were like me ten years ago cooking from Dining In, cooking from, you know, Nothing Fancy. Well, eight years ago. But you know, and thought to themselves, well, I'll never make, I'll never buy tomato sauce because I make my own. And now their lives have changed and their perspectives are different. And they're like, you know what? I might buy a tomato sauce.
How are you thinking about distribution? Because as Joe mentioned in the intro, one thing we've learned from conversations with different food and drinks and snack companies is like, you kind of live and die by the shelf space that you get. Oh yeah, at my level maybe. Okay. And then also like, which comes first, is it a distribution agreement or the actual scaling of the operation?
This is exactly where I'm at right now. I'm like in the thick of these conversations of trying to figure that out, because do I find a new co-packer that can meet the needs of potentially being in Whole Foods? Well, then, without a Whole Foods contract, I'm sitting on hundreds of thousands of dollars of product. And where does that product go then? I'm paying for storage for that product. So how do you move that without having that deal in place? You also, I would imagine Whole Foods is not going to give you something unless they know for certain that you can produce it. And I'm assuming they want some proof of concept. But right now I'm, it's very chicken or the egg and I'm sort of like, okay, what has to happen first? Is it the person who's going to get me that relationship with Whole Foods? Is it the co-packer that I know can fulfill and execute at the level that I want? And, you know, these questions are being asked and answered very quickly. And, you know, next, if we had done this meeting next week, I probably would have a better answer for you to come back into it. Yeah, I guess. We just do a quick follow. Well, it's so funny. I'm sure anyone listening to this that does know a lot about CPGs is like, this woman has no idea, but I believe that's part of my charm and I kind of jump into everything that I do like really curious and excited. And I actually think that there's a lot of benefit to not knowing, because I think getting hung up on how things are done and what is the norm kind of limits you.
Are you just like surrounded right now by like food industry execs that are promising they can take your business to the next level? Maybe they did a stint at Whole Foods or something like that and like, hire me. We can. There's a few more.
There's a few. There's, yes, the inbox is very busy right now. And I will say primarily women, which is really encouraging. And yeah, I think there's always somebody that's like, I can help you. And then some people that are like, I want skin in the game. Some people are like, I want to help you find the money so that I can have skin in the game in the future. And I think that these companies become so hot and then often plateau or crash or people don't care anymore. Protein's no longer a thing. Nobody wants to drink this type of thing. But to me, I am such a legacy brand person and I believe so firmly in well-made products that are built to last that never go out of style. And to me, this is that. And I'd rather be successful over a really long term than like a flash in the pan or like hot right now. And then note next year nobody cares and then I'm screwed.
Yeah. Tomato sauce is definitely Lindy, I think.
Yeah. Do you know what Lindy means? I don't know.
Oh, I've heard it, not sure four times.
No, but it's sort of a non-joke. Yeah. It just means it's lasted a long time.
And therefore one can infer that it will last a long time. Okay, I love it. I'm going to adopt that word and my patches. It's a good word to use.
What's been the most challenging aspect of building this business? Because, you know, you're talking about a bunch of different things all at once. There's the financing, there's distribution, there's logistics, there's actually making the product, branding, all of that.
I will say I sort of did everything that was easiest first, which was developing the recipe, figuring out the label, like the creative, fun stuff that I feel qualified to weigh in on and execute. And now we're at the hard part where it's like, okay, we've made the sauce, we've sold it. People love it.
Okay, that feels like the hard part for a lot of people.
For me, that was the easy part. And now, you know, I was saying to someone the other day, like, what I'm really craving as an adult in the room, and I need a boss in this venture, you know what I mean? Like, I'm so okay, I have the sauce. It looks great. It tastes great. People want it. How do what? What now? And I need somebody who knows what they're doing to come into the room and say, here are the here's the order of operations, here's how much that's going to cost. Here's who's going to do that. Like when you're starting a business like this, there's nobody to tell you. And so you do sort of feel a little vulnerable to people that are like, I can help you.
And so it becomes sort of this personality vetting and who do we vibe with? Who do you think understands you that it doesn't just see dollar signs and it's again built on trust and like who's going to like really be in this with you to best advise what's best for you, the business owner and also the product, and not just sort of treat you like a mouthpiece for a thing that can make the money.
