speaker-0: This is Shelf Space. This one's with Aaron Henderson from Sweetleaf, an early investor in Olipop and one of the sharpest CPG minds I know. We talk holograms in the aisles, QR codes that finally do more than slow load a website and the future of fiber and stevia as health-focused ingredients. We also get into how brands like Drizzle Honey are navigating US-Canadian tariffs and what it takes to build a shopping experience people actually enjoy. And a quick thank you to the businesses helping bring shelf space to your pod box, Pacific Coast Distribution, Faskin Law, Picnic Creative, TD Business Banking, Benchmark 60, and REMA. Okay, here's my conversation with Aaron. Aaron, we're reacquainting after many years apart. Now I know we just met really for the first time in twenty twenty two auspiciously through an event at Expo West. And we have some mutual friends and connections in the industry, but being able to connect with you today is really cool. And I want to kick it off with my first question. And that's if there was one innovation in the grocery store that you would love to see in the future, what would it be?
speaker-1: All right, I I got one for you. This could be some nonsense, Coram, but I think this is cool. I still think founder stories matter. Maybe I'm in the minority there, but I think consumers care about this. And if you go into a grocery store, wouldn't it be cool if it let's go like hologram? We're talking Elvis, Michael Jackson, you know, the the hologram stuff. You could push a button on your phone, however works, hologram pops up in the aisle. And you get to hear the founder a little fifteen, thirty second snippet on why they created this item and why it's amazing. I'd love to see something interactive at store shelves. We get that online. We do not get that at retail the same way though.
speaker-0: But the marketers tell us that QR codes solve all of our problems.
speaker-1: Once again, maybe I'm the minority. I hate QR codes.
speaker-0: Day I saw a QR code on something, and it was there was no explanation about what it was just a QR code. It was just like this. It reminds me actually, I walked, I was walking downtown Vancouver and there was a sign on a really nasty looking building, and it said, learn Hebrew online. And there was it, there's no dot-com, there was no right. It was just like it was just like a bumper sticker. Learn Hebrew online. All right, helpful. QR codes could sometimes be just like that. All right, holograms. That's the first time I've heard hologram answer. I've heard A lot of different answers, some of them very technical, very CPG, some of them more like
speaker-1: My default's always going to be consumer focused, right? How do we make something interesting, better, more interactive with our consumers and meet their needs? That's always my default.
speaker-0: My default is I like food in tubes. I'm always the guy that, hey, packaging, could it go in a tube? Let's put it in a dispensing tube. Anyway, that's that's my problem, not yours. So I know most of your work through your work at touch agency, but that's just one piece of the puzzle for you. I feel like the elephant in the room here with you is that as an investor in Olipop, what have you learned through that experience that is? guiding the next phase of your work, the next projects, the next brands that you're involved with. It w what was the sort of touch point that you bring from Olipop to what you're doing now?
speaker-1: Well, the through line is really midnight venture partners, the venture capital firm I I helped found with some partners. They run it day to day. You know, we've done 25, 30 investments at this point, of which Olipop is one that I'm also personally invested in. And there was just it's not new news here. There's been magic in that better for you soda space, whether it's Poppy's acquisition with with Pepsi or Ollipop's tremendous growth. So I think what I saw there was this idea of, and people are talking about fiber like it's protein 2.0. The funny thing is, man, protein has had a moment. Fiber's had a lot of moments over many decades. Fiber is not new news. That category said, hey, fiber can be sexy. It can be fun. It can be cool. And you can see influencers and UGC, you can you can see content being created around that. And that through line to where I'm at now with with Sweetleaf Stevia. We've had fiber in our sweetener packets for twenty seven years, long before it was cool. So our thing is, okay, we're seeing this in other categories. We can make fiber sexy and cool.
speaker-0: And sweetleaf is a stevia, ⁓ well, it's a stevia line. What's the play with stevia moving forward? Because it feels like it's had moments where it's been really impactful. It's got a lot of people talking about it. I think it's in use applications are quite diverse. Where do you see Stevia going?
speaker-1: You know, th this company brought Stevia to the US decades ago. It really is kind of the OG of of stevia brands. What made us different was sweeteners have always just been low, no cow sweeteners, kind of chemical based. We always wanted to go natural, plant-based, but we made it functional. Our filler is fiber in these packets. It's not ⁓ high glycemic, dextrose or multixtrose. So where do go with that? Well, trend wise, I think we're couldn't be better positioned right now. Our packaging speaks to that. We have prebiotic fiber called out on the front. But where does the category go? Here's what's interesting about stevia. If you look at the global market, now we're talking inclusion as ingredients and beverages, we're talking tabletop, we're talking liquids. The global market for stevia is bigger than sucralose or aspartame or saccharine. It's bigger than all of those. So it has a lot of room to run. I think where it runs now. is in unique formulas. Hey, can we combine it with monk fruit? What's the role of allulose in this? Can we create fun and interesting blends that meet consumers' needs that maybe bake better? So a lot of this comes back to usage occasion and format.
speaker-0: What format are you guys seeing on the sweet leaf brand side that's captured consumers' imagination?
speaker-1: It's funny, our our packets were kind of our OG product, but it's it's our liquids are a huge part of what we do in glass two and four ounce, you know, dropper bottles. And the format is, I don't know if you'd call it consumer friendly or not. It's not an on-the-go product, but the the value per serving at home is just tremendous, but it allows consumers to use it in ways we can't even imagine. We had a mom reach out to us the other day and she said, Hey, my kids oatmeal in the morning, right? I'm trying to get them to eat oatmeal, doesn't taste great. It's healthy. But we line up all of your stevia drops on the counter and they get to choose what flavor they add to their oatmeal in the morning. And you're like, wow, I hadn't considered that as a regular usage occasion. And so I think our liquids have just a versatility that, you know, a packet is gonna be used traditionally in one or two ways.
speaker-0: I think the dropper format is one that I look at a little suspiciously. I'm like, ⁓ that looks kind of medicinal. It doesn't have that culinary feel to it. If you put it in an Anthony Bourdain squeeze bottle, he loved it, he hated squeeze bottles. But the dropper format, when it's merchandised, it's a relatively small box. I would imagine on shelf. I know we were picking on the shelf reference the other moments ago, but on shelf, it can be a bit tricky in grocery. But in the natural, better for you, sort of the organic area or sort of that center of store where the health and wellness products are, that merchandising location often, not in every banner, but often comes with extra customer support, someone that knows those shelves, that knows those products, that can advocate on behalf of a brand. Do you see the dropper format? Extending into sort of the wider places and spaces of the grocery store? Or do you feel like it's still really that center of store, that wellness hub type play?
speaker-1: For the first many, many years, you you wanted the, you know, it was wild oats back in the day and sunflower and Henry's before all the the roll-up to the sprouts and whole foods, but you would have people in store educating people on Stevie and the Tinksters and the droppers. I I think you see that less and less now because I think Stevie has become so predominantly used and people are familiar with it. Having said that, our droppers fill an interesting space that can be good or bad. So for example, our four ounce is in Publix. It's our number one item in Publix, big mainstream gross or retailer in the Southeast, right? There's another major grosser retailer that said, Man, I do not want glass tinctures next to boxes of packets. And we said, Hey, listen, this is the number one item for us at Publix. It it does millions of dollars a year. Are you sure? Yeah, I don't want that. Well, just the other day, Wegman says, Hey. We're putting your your glass dropper in all of our stores. So it really is hit and miss on how conventional retailers view it. I think in the natural space, like you're talking about, it's just more prevalent.
speaker-0: And I feel like that format also is very receptive, like it fits really well with that last minute purchase right at the checkout where, you know, yeah, we see the gum and we see the candies and stuff. But I feel like there's an opportunity there for and and maybe it's like things like hydration tablets, they sort of find that spot. But I do feel like what I've seen sweet leaf can also fit in a place like that where it's that that moment, especially if they're been looking for they couldn't find it or they're not quite sure, but that moment where they have. 45 seconds to stand there and wait, or maybe longer, that there's a little education moment. Maybe your hologram could pop up right there, right at the till.
speaker-1: As a brand, and and we're not unique to this, right? We we have to somehow get more eyeballs on our brand. If you're Coca-Cola, maybe that's not your big concern, right? But most brands that are scaling think about that on a very regular basis. I know you had Brad from Joy Burst on recently. And anybody trying to scale, we're thinking about the same things, right? How do you use TikTok? What's the role of social media? How do you get more people in stores? How do you get them buying online? What's the role on me channel? We're all fighting a similar battle there. So if I can get a hologram at checkout Corwin, hey, I'm coming back to you.
speaker-0: Love it. That's great. Talk to me about the GLP one users. Maybe I'm a little late to the game, but it kind of feels like in the last year, maybe year and a half, it's really, really, you know, been dominating. How does Sweetleaf look at GLP one users as an opportunity to serve and support their goals?
speaker-1: Yeah, we've always supported various demographics and groups trying to overcome or battle or or navigate health goals and challenges, whether that was diabetics, whether that was people trying to lose weight, whatever it may be. So the GLP one ⁓ component just fits well into our our brand ethos. I think we've had, like a lot of brands, endless conversations about how do we reach them and meet them where they want to be met. I think the good news is they're looking for. Healthier options, they're looking for, you know, low and no-cal, they're looking for fiber, they're looking to have things that fit into their daily routines that don't force them to make radical changes. And I think we tap into a lot of that. How we reach them, you know, that there's no easy answer to that. They're everywhere. Like that that concept to your point twelve or eighteen months ago, we were talking about it at a cocktail party or a coffee shop, but almost in a hush-hush tone, are they using? Are they now it's just Everybody's using GLP ones, right? I it's it's just it went from hush hush to mainstream and it happened like that.
speaker-0: Yeah, it certainly feels that way. And one of the ventures I'm involved with is making an ingredient that replaces saturated fat with plant-based ingredients. And so looking at reducing saturated fat and reducing calories where it can. Yes, it might meet needs of GLP1 users, but the truth is that all of us are looking for something a little bit better, a little bit healthier, and ideally also more affordable. I get excited about grocery stores that have. thousands and thousands of better for you brands, not just, you know, an aisle or two. So whatever can be done, I think is important. And for the retailers that are leaning into that, I think it's really, really cool.
speaker-1: So this is something that I'm laying awake at night thinking about. I think retailers are, and I'm I'm lumping them all together, which is totally unfair. But I I think retailers are making a short-term win, but long-term fundamental mistake. And I'm growing in my conviction with this. So what's happening in retail on a broad level? You're seeing heavy private label and national brands. You just are. And that's That's whether it's a conventional retailer or natural food retailers. You're seeing this rapid growth of private label. And what you're not seeing anymore is, or to the the extent we need to be seeing, is younger emerging brands with real innovation, not line extensions and me too, but real innovation getting a crack at shelf. So what is that forcing consumers to do? We're all searching for those products. We're looking for healthier options and those brands trying to make healthy fun again, which is possible, by the way. We're getting that online. And so retailers, I think, are throwing their hands up saying, well, boy, the migration online is just killing us with e-commerce. You hear that narrative over and over again. Well, it doesn't have to be that way. You can offer innovative products at shelf. Now, Sprouts is doing that with some of their in-and-out stuff they're trying to do, with some of their early stage. You're seeing retailers try that, but they have not coalesced or figured out how do we really help consumers have a treasure hunt and discover items at shelf. They seem to have gone away with that and leaned into private label really heavy.
speaker-0: Yeah. Grocery shopping doesn't feel like the experience it could be in a lot of banners where it's very transactional and it's very repeat buying, just people kind of filling up their shelves with what was there before. Let's just fill it up again. But that discovery moment, I think retailers, they could be increasing basket size by simply just making it a little bit more fun, a little bit more delight to some of these aisles. So yeah, I a hundred percent agree with you.
speaker-1: It's such a great word, delight. My wife was at a store recently. I don't want to name them because it's not fair, but half of their stuff was behind a locked case. And she's like, I'm just looking for shampoo. You know? And she's like, I'd like to look at the ingredients on the back. Well, somebody stands over her like she's gonna run out the door with a shampoo bottle. And she's like, What what are we doing here? I don't have any interest to come back to this store. I think the delight is gone. That's such a good word.
speaker-0: I feel like, and I know you've been around this world a lot where like sampling, for example, has become, you know, hair nets and tongs and plastic panels and very like, put this in your mouth. Do you want to buy it? Those types of things. Whereas when you see activations that are kind of create a bit of a moment, make a bit of a memory, make someone laugh, bring that humanity to the grocery aisle, I get really excited. And not a lot, I know it's that's expensive to do, and I realize that. And and so I would rather see brands do those. Maybe they can't do as many of them, but do them, record them, make those experiences shareable, and do it in such a way that people feel like they're not just trying something new, that they're experiencing something new. And that's where it's like, yeah, that's a little bit of marketing mojo kind of pulled into it, but it's also it's it's thoughtfulness. And grocery has become, like I said, very transactional. And I think a lot of retailers, I think they would see more sales and more retail. repeat customers coming back more frequently if they made their aisles friendlier.
speaker-1: Love it. I'm on board.
speaker-0: All right. Okay. Let's start a grocery store. Just kidding. Let's talk borders for a moment. I think I love the fact that you're in Washington right now because I can see you from my house.
speaker-1: Vancouver. And yet if I say I'm in Vancouver, everybody thinks I'm Canadian. So I gotta say Portland, Oregon.
speaker-0: You're in the wrong Vancouver. It's the wrong state in the wrong country. But ⁓ we'll call you the sister city if you don't mind. Okay. I like it. I love that we're so close up here in the Pacific Northwest. You guys are involved with ⁓ or you acquired a Canadian brand called Drizzle Honey. A Asia started it. I don't remember how long ago she started it, but she she was the bold founder, bringing that to market, being doing the trade shows. I've met with her and talked with her a bit over the years. I love the brand. It's such a strong brand. The product is fantastic. I'm assuming I know why you guys and you know bought it because it seemed like a really great product. But there must have been something else in what you saw in Drizzle that made you think, okay, this is a play for us. It fits in our portfolio. We see a win here.
speaker-1: Yeah, I was on the board at the time, on the board only at the time when the acquisition took place. You know, I'm still on the board now, but now I'm in the CEO role. And my job has been to to integrate it, execute, and build it out in the US. And you know, you you look at the sweetener category as a whole, and maybe this is GLP one related. It could be other factors as well. It could be Sugar kind of coming back and low sugar amounts of consumers are open to, but the sweetener category has been sluggish for a number of years. What hasn't been sluggish is honey. Honey continues to grow at a very nice clip. I think what a lot of consumers don't really understand in that data is it's regionally based. Honey is local as local can be. That's the way honey typically grows. In the case of Asia, she built a national Canadian brand. number one honey item through UNFI up in Canada. And we brought that to the US. We've launched it in Sprouts and Central Market and Gelsons and Fresh Chum and a lot of these places. And it's being received really, really well. You know, she's been doing this for 10 years. She's been in the US for a year, maybe, right? Here's the crazy thing about the US versus Canadian market. In the year we've had it in the US, it's probably 60, 70% of what Canada is. already in a year. And she's been doing this 10 years in Canada. By next year, probably Q1, it'll overtake Canadian sales. It just goes to show how big the US market is when it really comes down to it. And so we're building this now in two countries. She ⁓ is still in Canada with her team. We've kept all her team on. And we're building this simultaneously in both countries, bilingual packaging. So it's been, it's been fun. I talk to Asia every single day.
speaker-0: Love it. It's an innovative product. I mean, honey, you said the honey category grows very regionally. It's also very kind of commodity-ish. And also a lot of manufacturers, they just kind of put their local stamp on what in fact is imported honey from other countries. So it's a little bit also the dark arts of the honey industry, a little bit sketchy. Her brand is one that is just it's upscale. It's got flavor profiles that I think are. not too weird. You know, they're creative and they're interesting and the hot honey is just unbelievable.
speaker-1: Her hot honey, we spend a lot of time talking about this. I said, obviously Mike's hot honey has just done tremendous work, right? But I said, Do you know you have full chilies in yours Asia? You can see the actual chilies. Your honey is entirely different from a spice level and an efficacy level compared to other brands. We should talk more about that. Where your honey comes from bees in Canada and is produced in Canada. The other brands are using it maybe produced in Canada, but it's honey coming from other markets around the world.
speaker-0: Yeah. What's been this dynamic? I know geopolitically it's a little bit tricky. The the food world has been fractured a little bit because we're actually one big happy family in CPG. And ⁓ Canadian brands love working in the US. And when I talk to US brands coming north, they're they're excited. There it's always been good vibes. Probably no better place to experience that than Expo West, where it's it just feels like, you know, Canadians are welcome. We're all excited to go down to the US and but You know, lately that's been a little bit more difficult with tariffs and other such factors going on. What's it been like for Drizzle to be pulled into the US right in the middle of what has been one of the more difficult eras of CPG?
speaker-1: Yeah, we, you know, we sell even though we're US company, we sell in Canada. We sold in Canada for decades. We had set up a Canadian entity prior to the acquisition of Drizzle. You know, we're essentially running two companies now, too, a Canadian entity and a US entity. So it's been taxing on our team. There's been a lot of learnings. We've had to learn a lot of international law, tariffs, shipping rates, border control. I mean, it has been a crash course for all of us. But I think if we look up Man, we've navigated it well. As well as we really could. Margins continue to improve. We have a great supply chain and ops team that's navigated this. So knock on wood, it's gone really well. Now, having said that, as we're filming this in the last 24 hours, a lot of new tariffs have just popped up. So as of Monday, we'll navigate it again.
speaker-0: Yeah, I I got an email from someone on my team and there was like the subject line was tariff. I'm like, here we go. Another round. You know, I think the food system is very resilient. It drives growth and innovation and change because it must really. The demand from consumers is there and retailers need problems solved. And a lot of people have been rolling up their sleeves for a long time. And yeah, you're right. The it's just the the game has changed a little bit. So my last question for you, and this one's fun. So Let's see how this goes for you. Your favorite grocery shopping experience anywhere in the world. Where was it?
speaker-1: ⁓ my gosh. I'm one of those nuts that I travel a lot internationally for fun with my family. When I'm in another country, hey, we're hitting grocery stores, guys. And my kids know it. My wife knows it. They both, ⁓ you know, but they do it. You know, in a lot of these other countries, they're smaller, more neighborhood markets. That's just a common thing compared to the US, right? Giant grocery store. And so I fell in love with a couple of local markets in Portugal that we would walk. And carry the bag home like we were locals and just such a different experience of living in the suburbs in the US. We were in Jordan not too long ago visiting Petra, and we had a driver and we stopped at this little market in the middle of nowhere. And we sat down and had tea and coffee and bought a couple of, you know, pieces of fruit. And it was, you looked around, we were the only people there. We were the only cars within miles. We were on a mountaintop in the middle of nowhere. And here we are in a little market having tea and coffee with the owner. trying to figure out communication and buying a local fruit. And you're just like, man, this is so un-American. It just is, right? And but it it was just such a novel and fun, fun thing. So I think I fall in love with the novelty versus really the the rational execution of the way we operate in the US.
speaker-0: that brings you delight to experience food buying in in a more cultural setting and a more ⁓ it's sort of in that community context, yeah, which is a beautiful thing.
speaker-1: Which which is what food and and it is it was what it was meant to be. You kinda you mentioned Anthony Bourdain earlier in this. That's what it was always meant to be a gathering of people and and and you know, sharing ideas and thoughts.
speaker-0: Well I love it that we're more reconnected again. ⁓ it's great to to sync up again and thanks for being on Shelf Space and appreciate you and all that your team is doing. And it's great to see Sweetleaf growing and just expanding and so creative, even though it's got such a legacy, though it's really remarkable.
speaker-1: Thank you.
speaker-0: Thanks for listening to this episode of Shelf Space. If you like what you hear, I would be eternally grateful for a five-star rating and a quick share on social. Your support means the world to me and our partners: TD, Faskin, Rema, Pacific Coast Distribution, Picnic Creative, and Benchmark 60. For bonus content and resources from our sponsors, go to shelfspacepodcast.com. I'm Corbin Hebert. I'm glad we're on this rocket ship together. I'll see you in the future.
speaker-1: All right, I I got one for you. This could be some nonsense, Coram, but I think this is cool. I still think founder stories matter. Maybe I'm in the minority there, but I think consumers care about this. And if you go into a grocery store, wouldn't it be cool if it let's go like hologram? We're talking Elvis, Michael Jackson, you know, the the hologram stuff. You could push a button on your phone, however works, hologram pops up in the aisle. And you get to hear the founder a little fifteen, thirty second snippet on why they created this item and why it's amazing. I'd love to see something interactive at store shelves. We get that online. We do not get that at retail the same way though.
speaker-0: But the marketers tell us that QR codes solve all of our problems.
speaker-1: Once again, maybe I'm the minority. I hate QR codes.
speaker-0: Day I saw a QR code on something, and it was there was no explanation about what it was just a QR code. It was just like this. It reminds me actually, I walked, I was walking downtown Vancouver and there was a sign on a really nasty looking building, and it said, learn Hebrew online. And there was it, there's no dot-com, there was no right. It was just like it was just like a bumper sticker. Learn Hebrew online. All right, helpful. QR codes could sometimes be just like that. All right, holograms. That's the first time I've heard hologram answer. I've heard A lot of different answers, some of them very technical, very CPG, some of them more like
speaker-1: My default's always going to be consumer focused, right? How do we make something interesting, better, more interactive with our consumers and meet their needs? That's always my default.
speaker-0: My default is I like food in tubes. I'm always the guy that, hey, packaging, could it go in a tube? Let's put it in a dispensing tube. Anyway, that's that's my problem, not yours. So I know most of your work through your work at touch agency, but that's just one piece of the puzzle for you. I feel like the elephant in the room here with you is that as an investor in Olipop, what have you learned through that experience that is? guiding the next phase of your work, the next projects, the next brands that you're involved with. It w what was the sort of touch point that you bring from Olipop to what you're doing now?
speaker-1: Well, the through line is really midnight venture partners, the venture capital firm I I helped found with some partners. They run it day to day. You know, we've done 25, 30 investments at this point, of which Olipop is one that I'm also personally invested in. And there was just it's not new news here. There's been magic in that better for you soda space, whether it's Poppy's acquisition with with Pepsi or Ollipop's tremendous growth. So I think what I saw there was this idea of, and people are talking about fiber like it's protein 2.0. The funny thing is, man, protein has had a moment. Fiber's had a lot of moments over many decades. Fiber is not new news. That category said, hey, fiber can be sexy. It can be fun. It can be cool. And you can see influencers and UGC, you can you can see content being created around that. And that through line to where I'm at now with with Sweetleaf Stevia. We've had fiber in our sweetener packets for twenty seven years, long before it was cool. So our thing is, okay, we're seeing this in other categories. We can make fiber sexy and cool.
speaker-0: And sweetleaf is a stevia, ⁓ well, it's a stevia line. What's the play with stevia moving forward? Because it feels like it's had moments where it's been really impactful. It's got a lot of people talking about it. I think it's in use applications are quite diverse. Where do you see Stevia going?
speaker-1: You know, th this company brought Stevia to the US decades ago. It really is kind of the OG of of stevia brands. What made us different was sweeteners have always just been low, no cow sweeteners, kind of chemical based. We always wanted to go natural, plant-based, but we made it functional. Our filler is fiber in these packets. It's not ⁓ high glycemic, dextrose or multixtrose. So where do go with that? Well, trend wise, I think we're couldn't be better positioned right now. Our packaging speaks to that. We have prebiotic fiber called out on the front. But where does the category go? Here's what's interesting about stevia. If you look at the global market, now we're talking inclusion as ingredients and beverages, we're talking tabletop, we're talking liquids. The global market for stevia is bigger than sucralose or aspartame or saccharine. It's bigger than all of those. So it has a lot of room to run. I think where it runs now. is in unique formulas. Hey, can we combine it with monk fruit? What's the role of allulose in this? Can we create fun and interesting blends that meet consumers' needs that maybe bake better? So a lot of this comes back to usage occasion and format.
speaker-0: What format are you guys seeing on the sweet leaf brand side that's captured consumers' imagination?
speaker-1: It's funny, our our packets were kind of our OG product, but it's it's our liquids are a huge part of what we do in glass two and four ounce, you know, dropper bottles. And the format is, I don't know if you'd call it consumer friendly or not. It's not an on-the-go product, but the the value per serving at home is just tremendous, but it allows consumers to use it in ways we can't even imagine. We had a mom reach out to us the other day and she said, Hey, my kids oatmeal in the morning, right? I'm trying to get them to eat oatmeal, doesn't taste great. It's healthy. But we line up all of your stevia drops on the counter and they get to choose what flavor they add to their oatmeal in the morning. And you're like, wow, I hadn't considered that as a regular usage occasion. And so I think our liquids have just a versatility that, you know, a packet is gonna be used traditionally in one or two ways.
speaker-0: I think the dropper format is one that I look at a little suspiciously. I'm like, ⁓ that looks kind of medicinal. It doesn't have that culinary feel to it. If you put it in an Anthony Bourdain squeeze bottle, he loved it, he hated squeeze bottles. But the dropper format, when it's merchandised, it's a relatively small box. I would imagine on shelf. I know we were picking on the shelf reference the other moments ago, but on shelf, it can be a bit tricky in grocery. But in the natural, better for you, sort of the organic area or sort of that center of store where the health and wellness products are, that merchandising location often, not in every banner, but often comes with extra customer support, someone that knows those shelves, that knows those products, that can advocate on behalf of a brand. Do you see the dropper format? Extending into sort of the wider places and spaces of the grocery store? Or do you feel like it's still really that center of store, that wellness hub type play?
speaker-1: For the first many, many years, you you wanted the, you know, it was wild oats back in the day and sunflower and Henry's before all the the roll-up to the sprouts and whole foods, but you would have people in store educating people on Stevie and the Tinksters and the droppers. I I think you see that less and less now because I think Stevie has become so predominantly used and people are familiar with it. Having said that, our droppers fill an interesting space that can be good or bad. So for example, our four ounce is in Publix. It's our number one item in Publix, big mainstream gross or retailer in the Southeast, right? There's another major grosser retailer that said, Man, I do not want glass tinctures next to boxes of packets. And we said, Hey, listen, this is the number one item for us at Publix. It it does millions of dollars a year. Are you sure? Yeah, I don't want that. Well, just the other day, Wegman says, Hey. We're putting your your glass dropper in all of our stores. So it really is hit and miss on how conventional retailers view it. I think in the natural space, like you're talking about, it's just more prevalent.
speaker-0: And I feel like that format also is very receptive, like it fits really well with that last minute purchase right at the checkout where, you know, yeah, we see the gum and we see the candies and stuff. But I feel like there's an opportunity there for and and maybe it's like things like hydration tablets, they sort of find that spot. But I do feel like what I've seen sweet leaf can also fit in a place like that where it's that that moment, especially if they're been looking for they couldn't find it or they're not quite sure, but that moment where they have. 45 seconds to stand there and wait, or maybe longer, that there's a little education moment. Maybe your hologram could pop up right there, right at the till.
speaker-1: As a brand, and and we're not unique to this, right? We we have to somehow get more eyeballs on our brand. If you're Coca-Cola, maybe that's not your big concern, right? But most brands that are scaling think about that on a very regular basis. I know you had Brad from Joy Burst on recently. And anybody trying to scale, we're thinking about the same things, right? How do you use TikTok? What's the role of social media? How do you get more people in stores? How do you get them buying online? What's the role on me channel? We're all fighting a similar battle there. So if I can get a hologram at checkout Corwin, hey, I'm coming back to you.
speaker-0: Love it. That's great. Talk to me about the GLP one users. Maybe I'm a little late to the game, but it kind of feels like in the last year, maybe year and a half, it's really, really, you know, been dominating. How does Sweetleaf look at GLP one users as an opportunity to serve and support their goals?
speaker-1: Yeah, we've always supported various demographics and groups trying to overcome or battle or or navigate health goals and challenges, whether that was diabetics, whether that was people trying to lose weight, whatever it may be. So the GLP one ⁓ component just fits well into our our brand ethos. I think we've had, like a lot of brands, endless conversations about how do we reach them and meet them where they want to be met. I think the good news is they're looking for. Healthier options, they're looking for, you know, low and no-cal, they're looking for fiber, they're looking to have things that fit into their daily routines that don't force them to make radical changes. And I think we tap into a lot of that. How we reach them, you know, that there's no easy answer to that. They're everywhere. Like that that concept to your point twelve or eighteen months ago, we were talking about it at a cocktail party or a coffee shop, but almost in a hush-hush tone, are they using? Are they now it's just Everybody's using GLP ones, right? I it's it's just it went from hush hush to mainstream and it happened like that.
speaker-0: Yeah, it certainly feels that way. And one of the ventures I'm involved with is making an ingredient that replaces saturated fat with plant-based ingredients. And so looking at reducing saturated fat and reducing calories where it can. Yes, it might meet needs of GLP1 users, but the truth is that all of us are looking for something a little bit better, a little bit healthier, and ideally also more affordable. I get excited about grocery stores that have. thousands and thousands of better for you brands, not just, you know, an aisle or two. So whatever can be done, I think is important. And for the retailers that are leaning into that, I think it's really, really cool.
speaker-1: So this is something that I'm laying awake at night thinking about. I think retailers are, and I'm I'm lumping them all together, which is totally unfair. But I I think retailers are making a short-term win, but long-term fundamental mistake. And I'm growing in my conviction with this. So what's happening in retail on a broad level? You're seeing heavy private label and national brands. You just are. And that's That's whether it's a conventional retailer or natural food retailers. You're seeing this rapid growth of private label. And what you're not seeing anymore is, or to the the extent we need to be seeing, is younger emerging brands with real innovation, not line extensions and me too, but real innovation getting a crack at shelf. So what is that forcing consumers to do? We're all searching for those products. We're looking for healthier options and those brands trying to make healthy fun again, which is possible, by the way. We're getting that online. And so retailers, I think, are throwing their hands up saying, well, boy, the migration online is just killing us with e-commerce. You hear that narrative over and over again. Well, it doesn't have to be that way. You can offer innovative products at shelf. Now, Sprouts is doing that with some of their in-and-out stuff they're trying to do, with some of their early stage. You're seeing retailers try that, but they have not coalesced or figured out how do we really help consumers have a treasure hunt and discover items at shelf. They seem to have gone away with that and leaned into private label really heavy.
speaker-0: Yeah. Grocery shopping doesn't feel like the experience it could be in a lot of banners where it's very transactional and it's very repeat buying, just people kind of filling up their shelves with what was there before. Let's just fill it up again. But that discovery moment, I think retailers, they could be increasing basket size by simply just making it a little bit more fun, a little bit more delight to some of these aisles. So yeah, I a hundred percent agree with you.
speaker-1: It's such a great word, delight. My wife was at a store recently. I don't want to name them because it's not fair, but half of their stuff was behind a locked case. And she's like, I'm just looking for shampoo. You know? And she's like, I'd like to look at the ingredients on the back. Well, somebody stands over her like she's gonna run out the door with a shampoo bottle. And she's like, What what are we doing here? I don't have any interest to come back to this store. I think the delight is gone. That's such a good word.
speaker-0: I feel like, and I know you've been around this world a lot where like sampling, for example, has become, you know, hair nets and tongs and plastic panels and very like, put this in your mouth. Do you want to buy it? Those types of things. Whereas when you see activations that are kind of create a bit of a moment, make a bit of a memory, make someone laugh, bring that humanity to the grocery aisle, I get really excited. And not a lot, I know it's that's expensive to do, and I realize that. And and so I would rather see brands do those. Maybe they can't do as many of them, but do them, record them, make those experiences shareable, and do it in such a way that people feel like they're not just trying something new, that they're experiencing something new. And that's where it's like, yeah, that's a little bit of marketing mojo kind of pulled into it, but it's also it's it's thoughtfulness. And grocery has become, like I said, very transactional. And I think a lot of retailers, I think they would see more sales and more retail. repeat customers coming back more frequently if they made their aisles friendlier.
speaker-1: Love it. I'm on board.
speaker-0: All right. Okay. Let's start a grocery store. Just kidding. Let's talk borders for a moment. I think I love the fact that you're in Washington right now because I can see you from my house.
speaker-1: Vancouver. And yet if I say I'm in Vancouver, everybody thinks I'm Canadian. So I gotta say Portland, Oregon.
speaker-0: You're in the wrong Vancouver. It's the wrong state in the wrong country. But ⁓ we'll call you the sister city if you don't mind. Okay. I like it. I love that we're so close up here in the Pacific Northwest. You guys are involved with ⁓ or you acquired a Canadian brand called Drizzle Honey. A Asia started it. I don't remember how long ago she started it, but she she was the bold founder, bringing that to market, being doing the trade shows. I've met with her and talked with her a bit over the years. I love the brand. It's such a strong brand. The product is fantastic. I'm assuming I know why you guys and you know bought it because it seemed like a really great product. But there must have been something else in what you saw in Drizzle that made you think, okay, this is a play for us. It fits in our portfolio. We see a win here.
speaker-1: Yeah, I was on the board at the time, on the board only at the time when the acquisition took place. You know, I'm still on the board now, but now I'm in the CEO role. And my job has been to to integrate it, execute, and build it out in the US. And you know, you you look at the sweetener category as a whole, and maybe this is GLP one related. It could be other factors as well. It could be Sugar kind of coming back and low sugar amounts of consumers are open to, but the sweetener category has been sluggish for a number of years. What hasn't been sluggish is honey. Honey continues to grow at a very nice clip. I think what a lot of consumers don't really understand in that data is it's regionally based. Honey is local as local can be. That's the way honey typically grows. In the case of Asia, she built a national Canadian brand. number one honey item through UNFI up in Canada. And we brought that to the US. We've launched it in Sprouts and Central Market and Gelsons and Fresh Chum and a lot of these places. And it's being received really, really well. You know, she's been doing this for 10 years. She's been in the US for a year, maybe, right? Here's the crazy thing about the US versus Canadian market. In the year we've had it in the US, it's probably 60, 70% of what Canada is. already in a year. And she's been doing this 10 years in Canada. By next year, probably Q1, it'll overtake Canadian sales. It just goes to show how big the US market is when it really comes down to it. And so we're building this now in two countries. She ⁓ is still in Canada with her team. We've kept all her team on. And we're building this simultaneously in both countries, bilingual packaging. So it's been, it's been fun. I talk to Asia every single day.
speaker-0: Love it. It's an innovative product. I mean, honey, you said the honey category grows very regionally. It's also very kind of commodity-ish. And also a lot of manufacturers, they just kind of put their local stamp on what in fact is imported honey from other countries. So it's a little bit also the dark arts of the honey industry, a little bit sketchy. Her brand is one that is just it's upscale. It's got flavor profiles that I think are. not too weird. You know, they're creative and they're interesting and the hot honey is just unbelievable.
speaker-1: Her hot honey, we spend a lot of time talking about this. I said, obviously Mike's hot honey has just done tremendous work, right? But I said, Do you know you have full chilies in yours Asia? You can see the actual chilies. Your honey is entirely different from a spice level and an efficacy level compared to other brands. We should talk more about that. Where your honey comes from bees in Canada and is produced in Canada. The other brands are using it maybe produced in Canada, but it's honey coming from other markets around the world.
speaker-0: Yeah. What's been this dynamic? I know geopolitically it's a little bit tricky. The the food world has been fractured a little bit because we're actually one big happy family in CPG. And ⁓ Canadian brands love working in the US. And when I talk to US brands coming north, they're they're excited. There it's always been good vibes. Probably no better place to experience that than Expo West, where it's it just feels like, you know, Canadians are welcome. We're all excited to go down to the US and but You know, lately that's been a little bit more difficult with tariffs and other such factors going on. What's it been like for Drizzle to be pulled into the US right in the middle of what has been one of the more difficult eras of CPG?
speaker-1: Yeah, we, you know, we sell even though we're US company, we sell in Canada. We sold in Canada for decades. We had set up a Canadian entity prior to the acquisition of Drizzle. You know, we're essentially running two companies now, too, a Canadian entity and a US entity. So it's been taxing on our team. There's been a lot of learnings. We've had to learn a lot of international law, tariffs, shipping rates, border control. I mean, it has been a crash course for all of us. But I think if we look up Man, we've navigated it well. As well as we really could. Margins continue to improve. We have a great supply chain and ops team that's navigated this. So knock on wood, it's gone really well. Now, having said that, as we're filming this in the last 24 hours, a lot of new tariffs have just popped up. So as of Monday, we'll navigate it again.
speaker-0: Yeah, I I got an email from someone on my team and there was like the subject line was tariff. I'm like, here we go. Another round. You know, I think the food system is very resilient. It drives growth and innovation and change because it must really. The demand from consumers is there and retailers need problems solved. And a lot of people have been rolling up their sleeves for a long time. And yeah, you're right. The it's just the the game has changed a little bit. So my last question for you, and this one's fun. So Let's see how this goes for you. Your favorite grocery shopping experience anywhere in the world. Where was it?
speaker-1: ⁓ my gosh. I'm one of those nuts that I travel a lot internationally for fun with my family. When I'm in another country, hey, we're hitting grocery stores, guys. And my kids know it. My wife knows it. They both, ⁓ you know, but they do it. You know, in a lot of these other countries, they're smaller, more neighborhood markets. That's just a common thing compared to the US, right? Giant grocery store. And so I fell in love with a couple of local markets in Portugal that we would walk. And carry the bag home like we were locals and just such a different experience of living in the suburbs in the US. We were in Jordan not too long ago visiting Petra, and we had a driver and we stopped at this little market in the middle of nowhere. And we sat down and had tea and coffee and bought a couple of, you know, pieces of fruit. And it was, you looked around, we were the only people there. We were the only cars within miles. We were on a mountaintop in the middle of nowhere. And here we are in a little market having tea and coffee with the owner. trying to figure out communication and buying a local fruit. And you're just like, man, this is so un-American. It just is, right? And but it it was just such a novel and fun, fun thing. So I think I fall in love with the novelty versus really the the rational execution of the way we operate in the US.
speaker-0: that brings you delight to experience food buying in in a more cultural setting and a more ⁓ it's sort of in that community context, yeah, which is a beautiful thing.
speaker-1: Which which is what food and and it is it was what it was meant to be. You kinda you mentioned Anthony Bourdain earlier in this. That's what it was always meant to be a gathering of people and and and you know, sharing ideas and thoughts.
speaker-0: Well I love it that we're more reconnected again. ⁓ it's great to to sync up again and thanks for being on Shelf Space and appreciate you and all that your team is doing. And it's great to see Sweetleaf growing and just expanding and so creative, even though it's got such a legacy, though it's really remarkable.
speaker-1: Thank you.
speaker-0: Thanks for listening to this episode of Shelf Space. If you like what you hear, I would be eternally grateful for a five-star rating and a quick share on social. Your support means the world to me and our partners: TD, Faskin, Rema, Pacific Coast Distribution, Picnic Creative, and Benchmark 60. For bonus content and resources from our sponsors, go to shelfspacepodcast.com. I'm Corbin Hebert. I'm glad we're on this rocket ship together. I'll see you in the future.
