Why This Founder Invested $1M in His Own Production Line | Andy Whitehead | FigBrew | Profits on Purpose

Episode Description

In this episode of Profits on Purpose, host Nate Littlewood interviews Andy Whitehead, founder of FigBrew, a coffee alternative made from figs. Andy shares his unique journey from a PhD in physics to creating a beverage that addresses common coffee-related health issues. He discusses the challenges of building an in-house production line, the importance of R&D, and the sustainability aspects of his product. The conversation also touches on marketing strategies, the lessons learned from previous ventures, and the future of Fig Brew in the coffee market.

Key Takeaways

• Andy Whitehead transitioned from a physics background to the CPG industry.

• FigBrew addresses health issues associated with traditional coffee consumption.

• The company invested heavily in building its own production line for quality control.

• R&D is crucial for developing new products and improving existing ones.

• Sustainability is a key focus for FigBrew, differentiating it from traditional coffee.

• Health benefits are a primary selling point for consumers.

• Education is essential for increasing consumer awareness of FigBrew.

• The company aims to integrate upstream by starting its own fig farm.

• Andy emphasizes the importance of having a strong team and mentorship.

• Exit strategies are considered from the beginning to maximize future opportunities.

See More from Andy and FigBrew

• FigBrew's Official Website
• Facebook
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• LinkedIn

Listen to the full episode to discover how Andy's experiences can inspire and guide you on your entrepreneurial journey. Don't forget to subscribe for more insightful conversations!

I hope you enjoy this episode!

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– Nate and the Profits on Purpose podcast team

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Transcript

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00:00 Introduction to Figbrew and Andy's Background
02:08 The Journey from Physics to Coffee Alternatives
05:41 Understanding the Coffee Consumer's Needs
07:37 The Decision to Build an In-House Production Line
10:24 R&D and Product Evolution in the Beverage Industry
12:59 Financial Considerations of In-House Production
19:00 Sustainability in Coffee Production
25:43 Balancing Health and Sustainability in Branding
28:24 The Transition from Science to CPG
33:24 Lessons from Previous Ventures
40:42 Vertical Integration: Fig Farming and Production
44:03 Future Goals and Market Positioning
47:56 Key Metrics for Success in CPG

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Nate Littlewood (00:05)
Welcome back to Profits on Purpose, the podcast for e-comm and CPG founders who are looking to scale their businesses, both profitably and purposefully. I'm your host, Nate Littlewood from Future Ready CFO, which is the go-to fractional CFO solution for founders who are looking to turn financial chaos and confusion into business clarity and confidence.

Anyway, today's guest is Andy Whitehead, who's the founder of a company called FigBrew, which makes a coffee alternative made from, you guessed it, figs. Andy's background, however, is about as far from typical CPG as you can get. He holds a PhD in physics. He built and sold a technology company previously to Samsung before deciding to jump into the food and beverage space.

Now, most early stage CPG founders, as you guys will probably know, will often opt to work with co-packers, at least in their early days while they're getting things up and running. But one of the really interesting things about Andy's story is that he chose to take a very, very different path and has in fact invested over a million dollars into building his own production line for this product. And this is just one of the topics that we will be diving into in today's conversation. Andy, welcome to the show. It's so great to have you here.

Andy Whitehead (01:36)
Thank you. It's good to be here.

Nate Littlewood (01:38)
Fantastic. Well, listen, the journey you've had here, as I mentioned, is an unusual one. You sold a technology company to Samsung at one point in time. And from what I understand, you're also a physicist by training. Talk to me about the backstory here. Like, how did you end up producing coffee from figs? And, you know, what's the problem that the company is kind of going after here?

Andy Whitehead (02:08)
Sure, so the back story is that I had a PhD from an atomic molecular optical physics from UT Austin. I did a postdoc at Pacific Northwest Labs in analytical laser-based chemistry. I then got into the small business environment, built and sold a technology company, and then was looking around for my next endeavor.

And I knew absolutely nothing about CPG. However, I've been a lifelong coffee fan. And then like most coffee drinkers, as I got older, I developed sensitivities to the acid and the caffeine. I've, like many coffee drinkers, stumbled out of bed straight to the coffee pod for years and years. I really, really enjoy coffee.

That's one way street. And so I can only drink a very small amount of it. And so then I read an article a few years ago about how coffee was rationed during the Second World War, specifically in England. And when they were able to get their hands on coffee, they wanted to drink as much as they could. And so they mixed roasted fig with it to stretch the rations.

The reason they chose fig was first off, was commonly available. Fig grows on every continent except Antarctica. And whatever you blend with fig is what you primarily taste. So you could blend 50-50 fig and coffee and still get that wonderful coffee flavor, which is what they were after. Then after the war, everybody went straight back to coffee, which is what they were looking for.

It turns out they were adding something remarkably healthy with fig. And as it relates to coffee, is caffeine free, it's alkaline, it helps regulate blood pressure. So it kind of directly offsets everything that all the issues that people have with coffee. And I had never heard of this. And so it really piqued my interest. I dug into it as much as I could, learned what I could.

And so that triggered the experimental aspect of it. So I immediately went down to Costco, got some dried figs and started roasting and brining those to see, okay, is this really a thing or is this just, you know, somebody's made up attraction? I was literally just blown away with how good it tastes and how good my stomach felt once drinking coffee. And so it very much addressed that issue with me.

How do I stay in that coffee culture with something that's healthy and sustainable and get that same experience, the wonderful coffee flavor? And that's what we attempted to address. And that's what I think we have addressed.

Nate Littlewood (05:17)
Very cool, very cool. So it was, I guess, driven out of a personal need by the sounds and you were having problems with the acidity and the caffeine. Give me a sense of what percentage of coffee consumers or people who would like to be consuming coffee may have one or other of these problems with either the acidity or caffeine.

Andy Whitehead (05:41)
Yeah, so of the coffee drinking population as a whole, there's something like between 60 and 70 % have issues with these these particular aspects that caffeine leading to anxiety, the acid leading to digestive issues. Now, as the population gets older, that gets even higher and higher. So 65 and older, they're estimating 70 to 80 %

of the population is dealing with this issues. And the reason that's so broad is that there's a lot of unappointed thing. so anyone who's ever consumed coffee has most likely explored the upper limits of consumption. And almost invariably, it's not a financial limit. It's a physiological limit to how much they can take and leads to how much they're there.

so hyped up they can't think straight or their stomach's tied in knots. So, and you know, that's not going away. The population is getting older so that percentage is gonna climb. On top of that, there's kind of a backstory of sustainability and it's leading to all time high prices in coffee, which is a consumer product. Between disease, deforestation, climate change.

coffee prices are going through the roof and this is before the tariffs even kick in.

Nate Littlewood (07:13)
Right, Yeah, I do want to come back to the sustainability piece later, but something that I found really interesting and unusual about your story when we chatted the other day is the fact that you dove in and have actually manufactured your own production line. Tell me a little bit about that decision.

How and why did you decide that you were going to need to actually own this in in-house in order to be able to produce the product?

Andy Whitehead (07:47)
Sure, so my previous company, obviously used an electronics co-manufacturer and that was a very good experience. And so that's kind of initially when I set out what I intended to do. But then I found that there's not that base, historical base of manufacturing roasted fig as a beverage. All the information that was around in 1873 with all these fig

fig, roasted fig factories has since been lost. So there's no one we could turn to for guidance about how you do it, how you set it up, how you grind it, how do you, you know, process it to achieve the absolute best customer experience. And so then I thought, okay, we'll just set up a small area for R &D, figure out all this process and turn it over to a co-packer for us, which is almost invariably what CPG founders end up doing.

And what we found was that there was quite a bit more R &D that goes into the product. And a lot of that had to do with our desire to be sustainable from the ground up, all the way from acquiring products to identifying products to packaging and everything that goes along with it.

And in the end, it led to a lot of frustration on my part. It's like, why is this not better defined? And then I realized, well, it's not better defined because no one has defined it yet. And if I turn this over to a co-packer, he's going to have to do all this R &D when co-packers are definitely not set up to do R &D on a level of this where nothing is, you know, there's really nothing, no basis for it.

So that was the prompt for me deciding, I'm just gonna go ahead and invest the capital in acquiring and building out a commercial kitchen so that we have control over this. And that's what we did.

Nate Littlewood (09:57)
Okay. Is there a, is there a product evolution aspect to this? mean, is that in-house capability to do your own R &D and test ideas out in a way that you may find more difficult working with a co-packer? Is that sort of strategically important to the business or is it really more of a sunk concept?

Andy Whitehead (10:24)
though it's very important at this point in my estimation. example, right now we're trying to do the R &D to come out with a cold brew espresso version of fig coffee that can work in espresso martinis. A thriving subculture for espresso martinis. And if we want to be on the forefront of this, a long-term goal,

is to recreate the coffee culture, how and where coffee is served throughout the world. We need to be able to respond to this and come up with something that we can then relay to our customers, coffee shops, grocery stores, convenience stores, wherever it's sold. And so ended up being very important.

Nate Littlewood (11:15)
Okay. And you think the long-term product direction here is about pure fig-based coffees? Or is there a world where you might have a hybrid product like they did in the 1800s or whatever, where you would have like part coffee and part fig?

Andy Whitehead (11:35)
Because ultimately, if we are successful, I want to be able to teach the population how you manage your own caffeine intake using roasted fig. In which case, the reason there are multiple different coffee offerings, know, Highland coffee, African coffee, Lone Land coffee, Central American coffee, Arnolese, Vietnamese, Robustica, is that there's a world of different flavors in coffee.

and everybody has their unique favorites. And we really don't want to upset those. We want to keep you in that coffee culture with whatever you have decided is in your wheelhouse, but give you something now that can make that culture more robust, keep the flavor the same, but bring in health and sustainability benefits.

Nate Littlewood (12:33)
Gotcha, gotcha. So I think the R &D angle here and what this enables you to do from a product perspective is something that a lot of founders would probably find quite desirable. But the financial cost of actually going and building all of this plan is for a lot of them probably prohibitive. Can you?

Give me, I'm interested in two follow-on from that. Number one is in whatever level of detail you're comfortable sharing, I'd be curious actually, you know, how you spent the money that you did in terms of the plant and capital equipment. what sorts of stuff does one need to buy to actually set up a production line like this? The other question is how do you think about the, the breakeven point here?

Right? Like how much volume or sales you need to be generating to be financially better off as the owner of your own production line versus outsourcing and, you know, working with a copacker.

Andy Whitehead (13:42)
Yeah, so I don't believe I can address that adequately without addressing what your goal is when you start out. So we have a product that, well, quite literally, I currently know of no other fig coffee manufacturer in the world, even though it's been around hundreds of years, it seems to not be well known. But this is something that

we see as following behind the coffee culture and bringing some significant benefits to it. So if you look at all the R &D that needs to be done to generate and reach that potential, it's going to require over the course of a number of years, a significant investment in time and money. So if I am just look, you know, I want to start a CPG company, build it to a certain point and then sell it and exit, then okay, I may take a different approach.

I could say, okay, I will use a code backer. will let them do the R &D. Alternatively, I'm going to build something lasting that I want to solicit outside money. And there's several instances of companies doing just that, raising millions to tens of millions in capital just to build out a facility that can do not only R &D, but large scale production. And so,

To me, R &D is one thing, but building out large scale production right off the bat is a little over the top. Instead of build it, they will come, they will come and I will build it in response as long as I can meet demand. So those are some of the thoughts in the background that I was having to go through in terms of, okay, do I try to go with a co-packer and live with the consequences of inefficient

product development, or do I go ahead and acquire what we felt we needed for our purposes, which was to recreate the coffee culture? And so what that was, a relatively specific answer to your question, is we acquired a land, two buildings, each with their own commercial kitchens. But that's something that's now on my balance sheet that becomes part of the company, part of the basis for the company.

It is an unusual move, but it's not unheard of. kind of how it used to work in years past, especially with the brand new product.

Nate Littlewood (16:22)
Yeah. Yeah. And I guess when we're thinking about the financial impact, you mentioned you've obviously bought these assets and these buildings and plan are sitting on your balance sheet. I presume that your variable cost per unit is going to be significantly lower than it would be had you chosen to work with a co-packer. Therefore I assume that there's some, you know, volume or revenue level below which

You'd actually be worse off because you don't have enough volume to justify your own plant and equipment, but you're eventually going to get to a level where this actually makes you financially better off and owning the, know, owning this in-house is actually going to result in an expansion of your margins. Talk, talk to me about, you know, finding that point and you know, are you there yet? Is it still something that you're working on? where are you relative to that? You know,

that break even level, I guess.

Andy Whitehead (17:23)
Sure, yeah. So we actually have a finished community where we are profitable. And it directly was a result of this acquisition and the ability to make it on our own, or make the profit on our own. know, this came to light a day, it hurts your balance sheet, shows up there, but it really benefits your P &L, right? And it's specifically lowering the cost of goods if you can realize the sale.

You have to kind of trust that your sales will be where they need to be. So early on we did a lot of belly to trade shows where we got direct consumer feedback. And so on the basis of that, we decided, okay, we've invested this much. Sure seems like something's here. We can go ahead and invest out to achieve a higher production capacity.

lower the cost of goods by not having to go to a co-packer. So it has paid off pretty much like I thought. Took a little longer than I thought, you know, it always do. I don't have a heritage in CPG and it is a very user specific experience and people need to know who the owners are, need to know what their goal is.

Nate Littlewood (18:31)
So what he's doing.

Andy Whitehead (18:48)
you know, their plans are, who makes it, how it's made, who suffers from it and so forth. And that's something that I just never been good at, but I'm learning.

Nate Littlewood (19:00)
OK, we all are. It's a journey. And it certainly sounds like you're making some good progress here. So listen, I wanted to change direction a little bit and talk about the sustainability piece here. This is something that you and I touched on the other day when we chatted offline about it. I got the sense you've been through a few different

evolutions in terms of how you manage the sustainability messaging behind this product. Maybe a good point, a place to start, just so everyone kind of understands what we're talking about here. Could we maybe begin by comparing and contrasting coffee that's made traditionally with, compared to fig-based coffee.

And I'd also then love to hear about how you have kind of evolved the sustainability or environmental message behind this into your branding and communications.

Andy Whitehead (20:03)
Yeah, sure. So as a comparison with coffee, traditional coffee, every coffee tree in the world is grown in a narrow band around the equator. And unfortunately, that's where the rainforest is. And so there's intense competition for resources to grow coffee. And it's a

Part of the problem is just the output of a mature coffee tree. Mature coffee tree puts out less than two pounds of coffee a year on average. So if you're a coffee drinker and you drink a cup of coffee for a year, you've just consumed the output of about 20 coffee trees. So because of that intense competition and because of the region of the world where coffee is grown,

You have a lot of indigent farmers who, if you own a plot of land within that coffee growing belt, and you see your neighbor making and selling coffee like crazy, you're just, you're going to jump on that bandwagon. And so if you have anything on your property, any trees, you'll cut it down and plant coffees. Well, once you do that, you start to lose the little regional flavors of the coffees, you know, the Highland,

coffee from Honduras or the lowland, Guatemalan coffee, whatever it is. And in addition, it becomes a big smorgasbord for all the pests and the fungi that are attacking the coffee crop. So that even adds even more detriment to the coffee culture. And so fig is not like that. It's like say it's grown on every continent except Antarctica.

A mature fig tree puts out between 40 and 60 pounds of figs. Not only that, fig is about twice as concentrated as coffee. And by that, what I mean is that when people assess the strength of coffee, they're typically looking at the amount of total dissolved solids in the coffee. You know, the caveat that, you know, is coffee needs to be strong enough, the spoon will stand up in it.

And that refers to total dissolved solids and fig for the same quantity have twice the total dissolved coffee as or total dissolved solids as coffee. And so for the same strength, you use half as much. So not only that, it's shelf life is much longer than coffee. Once you pick that coffee cherry, you better start processing it right away. Ship it to where it needs to be. Wash it, ship it, roast it, grind it.

serve it up in a coffee house just as quickly as you can. So when I roast and grind my coffee, favorite coffee, I will typically put it in the refrigerator for two to three weeks. After that, I don't even bother. I just throw it away. Well, it's still, it's much better than Folgers or, you know, any more of the industrial coffee, but it's not what I'm after. Well, Fig, I pulled it out after two years and there's, really doesn't oxidize like coffee.

So that's yet another way to help reduce some of the waste and inefficiency in the coffee culture that would turn around and make it more robust and sustainable in the long run. anyway, I'm kind of rambling on here. I hope I answered your question. Now it's time to get me back on track.

Nate Littlewood (23:49)
Can you put some numbers around this? Like in terms of the environmental impact or carbon footprint or water consumption, is there any relevant benchmarks that would help people just understand the environmental footprint of these two side by side?

Andy Whitehead (24:06)
Yes, so from an environmental standpoint, it takes one eighth of the water required for a traditional cup of coffee as for a cup of egg coffee. Now that's from death to death, the entire life cycle to growing the product to serving up a cup of coffee, well the same amount of water in each cup, but you also have to dispose of it afterward.

Nate Littlewood (24:19)
Okay.

Andy Whitehead (24:34)
And so one eighth the amount of water, one 13th the amount of carbon for fig coffee as traditional coffee. So since we have started, we've estimated, if I'm doing this from memory, I don't have the number in film, but it's something like 5,700 coffee trees that we have been able to offset just by if we can replace

traditional coffee with fig coffee. Now that's not necessarily how it goes. We advocate blending it with your coffee, but that's our estimate of how many coffee trees we have prevented from having to be planted.

Nate Littlewood (25:16)
Interesting. So it sounds like there's a pretty compelling environmental angle to this. And we started the conversation with you telling me about some of the, I guess, health and wellness perspectives on the product. I'd love to understand how you've balanced these two in terms of your branding and communications over the years. What

you know, is one more compelling from a marketing perspective than the other? And have you, what have you experimented with? What have you learned from these two, you know, different angles or types of messaging?

Andy Whitehead (25:55)
Yeah, so I'll start personally. a personal perspective, the sustainability is a much bigger issue to me. I have always said I don't want to be walking down the beach somewhere and seeing one of our bags or boxes floating around in the ocean. just, my wife and I really enjoy the outdoors. We spend a lot of time out there.

So I think that really, for sure, but I think any company has a responsibility to minimize the impact on the environment for lasting purposes. And so there's other subtle things that you have to worry about, like indigent farmers. Our goal is not to stop drinking coffee and drink fig instead, because these guys are trying to, and women, guys and women, are trying to make a living.

So a solution that doesn't put them out of the job, but lets them continue to make money off of their livelihood is a wonderful solution to us. So for me, sustainability is a very big thing, even though I have to admit, I kind of got into it because of health reasons. And so short term, it's all about the health without a doubt.

Nate Littlewood (27:21)

Cool. Did you have any more to add on that? We'll take my sound and probably my video out from while you were giving your answer there.

Andy Whitehead (27:30)
We have dogs too.

actually like the sound of it. I don't believe so. think I answered your question. If you have another prompt, I'll be happy to slide off in a different direction.

Nate Littlewood (27:46)
Okay I'm going to move on to change directions a bit here.

So, and do you, as I mentioned during the intro, you have a fairly unusual and interesting background for a CPG founder. I think it would be fair to say that you came from a fairly hard science, you know, background education, educationally as a physicist. that's a lot about, you know, facts and numbers and measurable outcomes and being able to reproduce results in the world of, you know, physics and science.

The world of CPG and consumer products is very different to that and

Candidly, you know, a little bit like you, I'm also a, you know, naturally a math and sciencey sort of brain. And this was absolutely something that I struggled with for many, many years as the founder of a CPG and an e-commerce brand. I'm curious what your journey has been like into this world that is, you know, oftentimes a lot more qualitative, a lot more touchy feely. You know, what are, what are some of the aspects of being a CPG founder that you've struggled with?

Given your background and maybe some of the areas that you think you've actually outperformed and I'm sure there's areas where you've done You know a lot better than the average CPG founder as well. We came to hear, you know both sides of that coin

Andy Whitehead (29:16)
Yes, I'll start with the latter one first, because it is, as you indicated, a pretty unusual pathway. So that's to get your doctorate. And then once you do it, invariably move on to either teaching or research position. I chose the latter. So as a research scientist at a national laboratory,

I found that I was effectively starting and running a micro company, believe it or not. And that's the science. ultimately, it's the way scientists are graded is publish and perish. It's all about how many documents you can produce, how much original science you can categorize and record.

Nate Littlewood (29:54)
it.

Andy Whitehead (30:13)
That's how it's evaluated. But the path to get there is not unlike that of a business owner who's kind of thrown in there. It's okay, how am going to get it funded? Where's the money going to come from? How am I going to set this up? How am I going to get it done? What can I outsource? What can I leverage off of other people's experience? And so that is the similarity between

being a researcher in a national laboratory and someone who's going to, know, CPG founder who wants to start their own company. It pretty well comes to a screeching halt right there. You know, don't really have, you don't have many customers that you have to understand in the science world. It's more, like you say, very hard facts, very hard number. You are standing on the shoulders of giants.

but ultimately those giants are not consumers, they're previous researchers. And CPG is, I mean, you need to be very good at pulling details out of sometimes insufficient data because of the human variability amongst consumers, amongst buyers and brokers and distributors and all that. So that is...

something that is gonna be very new and intimidating to someone who comes from a numbers background. But I think it's that ability to think critically that I learned and developed in graduate school that greatly ease that transition. You run into something, wait a minute, I don't understand this. Why are these consumers asking for this? So you come to a screeching halt, you stop.

You look, study it from different directions. You you come up with experiments. Okay, if this is true, then this should also be true. And you test out that theory. And so that is how I have chosen to address this. Another thing I've learned, having run several businesses, is that you surround yourself with good people and good things happen.

If you have a good team and you're willing to leverage that team, not just micromanage that team, then that greatly eases the tasks that you're set out to do. And I've been very fortunate in just about every endeavor I've undertaken to have a great team around me.

Nate Littlewood (32:54)
Well, that's fantastic news. Fantastic news. I'd love to circle back to the Samsung thing for a minute and extract maybe a few more lessons there that are applicable to what you're doing now with FigBrew. So the previous business, I mean, we touched on it briefly earlier, but I'd love to actually just understand quickly what it actually did and what it was all about. And as a previously exited founder,

What are some of the lessons learned and what are some of the maybe perspectives that you gained from that that you brought into the current business and how were you maybe approaching things differently to a founder that had perhaps not been through that same experience?

Andy Whitehead (33:44)
My previous company, we made video transmission equipment that took professional synchronized audio and video, converted those to ethernet packets, and sent those through network appliances that are switchable and routable just like data.

Nowadays, no big deal, everybody knows Zoom. That's what it does off a laptop or cell phone. Back in the day, integrators were still stringing coaxial cable to send video around. And so we approached it from a different direction. Like I say, I always loved solutions hiding in plain sight. This was a period of time when network bandwidths were getting larger and larger.

compression, video compression algorithms were getting more more sophisticated. People were looking to disseminate video bi-directionally from multiple different destinations. And so our competitors were building products out of dedicated chip sets that were built just for that purpose of switching video. And so they very low volume, relatively speaking to network chips,

much more reliability. So when we started doing it, we were down by what the industry was doing at the time. We looked and said, well, why did you do this when you have a switch chip over here that's much faster, much more capable, much higher bandwidth, much higher reliability, and has one-tenth the amount of this dedicated switch chip that you have here. And so we thought, well, we're just not going to do that. We're just

go ahead and build our product line based on this existing network switch chip that is made by, you know, in the millions by well-known manufacturers. And boy did we underestimate the work that it would take to educate that integrator seer in how you go about doing this because laptops just weren't in their toolkit. So you had to teach him or how you connect to a switch, how you configure the switch. And so

Ultimately, when it was adopted by the industry, we didn't really have a lot of competition for network deployment on the enterprise level. And so as a result, we ended up selling to a division of Samsung. And then at that point, I had a three-year lock-in. The lock-in was over. I moved on. Had I been smart, I would have just stayed where...

in that market and continued to advance the technological capabilities of video distribution. I've never claimed to be that smart. I've also never really been afraid of attacking an entirely new market. And so maybe that was somewhat naive, but I thought, you know, I've kind of been there, done that. It was fun, but I want to move on. And so

I decided on the basis of my lifelong one of coffee. Well, let's just get into the CPG world. And so having had a successful exit, I probably had more leeway to make that critical decision about whether to go with co-packing or to build out my own facility if I felt I needed it. I think a lot of CPG founders

these days just don't have that capability unless they're willing to spend 100 % of their time just raising money off of VC or angel investors. And I definitely did not want to spend my time doing that. That's not what excites me. I'm excited about building something that wasn't there before and seeing market adoption for it. So long-winded explanation, but I hope I've answered your questions.

Nate Littlewood (38:08)
You got part of it, which is the backstory and what the business actually did. But, and you, made a very good point that the, guess, financial rewards of having an exit basically put you in a situation where you had a choice to make that most other founders just simply don't have that choice. you were able to decide whether or not you wanted to build your own plan. And for most other founders, like that.

You know, that option's not even on the table. I understand that piece. I'm curious though, having had that prior experience as an exited founder, is there anything unusual, that you think you're bringing into your, your current role as a CPG founder in, know, in terms of the way that you're doing business that perhaps other co- founders who haven't had that exit experience might be missing or overlooking.

Andy Whitehead (39:06)
Yes. Having exited once, I had a firsthand exposure to what an acquirer would look for in a company. What's your balance sheet? What's your P &L? What's your cash flow? Do you own the facility that you're working or are you just renting? And so I then had the opportunity to start this company

with an eye toward, put myself, you know, 10 years down the road. If I, there's somebody who wants to be a good partner and acquire this company, what would they look for as a very attractive target? And so from the start, pretty much, I have tried to keep that in the back of my mind and build out what I felt would be the highest value to the company.

upon a future acquisition. And that's just not limited to intellectual property, which is critical, but it's sourcing channels, it's sales channels, it's distribution partners, there's many facets to this that I think you have to cover all those bases when you really want to extract the best value out of M &A activity.

Nate Littlewood (40:34)
Yeah, okay, that makes a lot of sense. Makes a lot of sense. And am I correct to understand that you also started your own fig farm?

Andy Whitehead (40:42)
That is correct. That's right.

Nate Littlewood (40:45)
So you're not just manufacturing and producing, but you've actually vertically integrated upstream into the, I guess you call it raw materials or primary input. Tell me a little bit about what's going on there with the, with the fig farming.

Andy Whitehead (41:02)
Yeah, that's not something a coffee company can do is start growing coffee trees and that much. But it is something that we felt we could do and would bring rural benefit. And this this relates to not just raw goods, but customer experience. Customers these days want to be part of the story. They want to know what you're about. They want to feel like they're invested in that story. And so.

You know, to start our own fig farm was a was a huge, huge commitment. I mean, farming is a very tough endeavor. My family and has my parents and grandparents have all farmed for a living. So I'm very well aware of how much goes into that, how susceptible and risky it could be to weather and other factors, know, soil, soil properties, that kind of stuff.

But I think it's something that would be a real benefit to the company, not just from a balance sheet perspective, but from a customer experience objective. I see a lot of social media posts about, over the years, watch our little fig farm grow. I mean, it's a small farm today. We only planted 58 fig trees this last year.

know, nine different varieties. The goal is to figure out which grow best in this environment, which make the best beverage from a flavor standpoint. And then on the basis of that, expand that fig farm to where we're hopefully growing a significant fraction of what we're actually processing. And then that's another way we can potentially reduce the cost.

Because right now, fake coffee is nowhere near the volume of traditional coffee. So we're always struggling to bring our prices down within expectations and feel this is one way we can do that when a lot of other manufacturing companies cannot.

Nate Littlewood (43:13)
Yeah, that's amazing to think that you're vertically integrated all the way from farming and producing the primary import to then owning and controlling your own R &D and production line. And I think you even go as far as putting it into bags. Is that correct?

Andy Whitehead (43:32)
That is correct. you're doing all packaging for everything except the K cups we do in house. Yeah.

Nate Littlewood (43:39)
Okay. Yeah. Amazing. I mean, it must yield so much control and insights and there must be some fascinating stuff you can do with being able to have that much control and influence about over every step of the process. It's really intriguing. Tell me, where are you wanting to take this business in the future? What's the end game here?

Andy Whitehead (44:03)
Yeah, the end game is to follow along behind coffee wherever and however it's sold. That's our long term goal. If there is a coffee shop in the U. S. Who sells coffee premium coffee, we would like to be a partner to them to help them reach customers that they can't currently reach primarily because of health issues. And then in the long term,

I mean, even the coffee industry today says that the coffee industry by 2050 will be entirely different, that it will be different logistics, different growers, different varieties, maybe Arabica falls by the way in favor of robustica because it's much more drought resistant and can handle different climates. So we feel we can make significant contributions not just to the

to the subset of coffee drinkers who are starting to feel alienated by coffee or not fully participatory, but to keeping the coffee culture around for as long as possible. We love the coffee culture here. We're not trying to get rid of it. We want it to be here for decades and we wanna be as much a part of it as we can and enjoy it as long as possible. So that's our end game.

Nate Littlewood (45:28)
I appreciate that. What about you as a business owner? Like, are you wanting to presumably exit this one day or do you think this is a lifestyle business in the medium term?

Andy Whitehead (45:41)
Well, I think it's inevitable that if we have success, we will be approached by a partner. And I think it's very critical to be in a position of negotiation where we have some leverage to choose that partner and make sure that their goals are aligned with us. So I'm not saying we're going to exit next year, but I think we had better be prepared for that eventually.

happening and that's not necessarily a walk away. It can be very strategic and it can be very rewarding. You can merge with somebody who has a much larger sales and distribution channel and realize a much broader reach if they are aligned with what you're trying to do. Otherwise, it can very much be a catastrophe. But I think if we realize

the growth potential that I see is there, it very much will be part of the discussion at some point in the future.

Nate Littlewood (46:50)
Okay, and what do you see as the critical steps in getting you from where you're at right now to the point where you have these multiple exit opportunities or acquirers?

Andy Whitehead (47:05)
Education, it boils down to education. Too few people know about fig coffee and its advantages and why, you know, why do we, why would we even care about this? And so educating a large population worldwide effectively about this product is a daunting task. And to do it efficiently, needs, takes, frankly, takes

mentorship by people who have a skill set that I don't possess. I'll be perfectly honest. I've learned a lot of things, but one of the big things I've learned is where my skill set falls short. And if as a CPG founder, you cannot admit that, then you're going to have a tough road to hoe.

Nate Littlewood (47:56)
into that indeed indeed well Andy we need to wrap things up pretty shortly over here but I've got a couple of questions for you before we do the first is a regular on this show which is how often do you track it and why

Andy Whitehead (48:13)
the number

one is sales, but sales can mean different things at different times. my personal favorite other than just sales is new customers. How many new customers are we getting every month? How many new subscriptions are we getting every month? And so if you stagnate, then your return customer rate goes up and it looks really good. But that's a false metric.

The best KPI is how many new customers and how many subscriptions or return orders you get every month. That tells you how many people are adopting it and how good your marketing is to bring in new customers. And if both of those are high, then you've got a very good product and you should be able to make it into a successful CPG business.

Nate Littlewood (49:09)
Absolutely. And I can see how that is very well tied to your earlier comment about education, right? Like a customer doesn't become a customer until they're educated and they understand the problem and the product. So the more you're educating, the more new customers you'd have coming in the door, I presume. So yeah, it makes a lot of sense.

Andy Whitehead (49:29)
That's it exactly.

Nate Littlewood (49:32)
Okay, Andy, well, where should folks go if they'd like to learn more about you and what you're up to?

Andy Whitehead (49:41)
Yeah, so obviously you can go to my LinkedIn page. I post there not as often as I could, but that kind of gives you my past educational background, some thoughts about what I like to do, what I consider interesting. You can also go to our website figbrew.com where we have a founder's page, what we intend to do for the company, where we want to grow, what we think the benefits are.

So that would probably get you about as familiar with my story as you can get at this point.

Nate Littlewood (50:16)
Okay. Perfect. Perfect. Well, Andy, this has been an unusual, but really interesting conversation. I don't get to talk to many people of your background and certainly even fewer who have taken the approach that you have to, you know, in-house production and vertical integration all the way to, to the farm. And, it's a fascinating story. Love what you love, love what you're doing and appreciate you coming on to share it with the audience today.

So thank you again and we'll see you next time. Take care.

Andy Whitehead (50:50)
Okay, thank you.