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February 14, 2024
Learn how you can identify your market opportunity, unearth your brand's unique story, and drive new commercial success for your local food business.
Will Schreiber: Glad I've already had a couple of coffees. Ashley, Sarah, as promised, we usually kick these off with what your coffee ritual is. So I'll go first. I'm drinking drip coffee at Industrious in Union Square right now in New York. Where are y'all? What's your coffee situation?
Ashley Alden: I'm just drinking a drip coffee as well. I just had a baby two months ago, so we're in a Keurig moment right now. It's all about convenience, but I definitely get a cup of coffee in as soon as I can every morning. I'm in the suburbs of Chicago.
Sarah Sitz: I'm on my second cup of coffee actually today. I already have a cold brew with some almond milk. It's usually my go-to, or if I'm drinking warm, like an almond milk cappuccino. I want to get fancy. I'm in Chicago, in Lincoln Park, currently at a publishing space.
Will Schreiber: Nice. I used to live in Chicago. I think that's come up a few times on these coffee chats. So it's really cool to talk to you all. I feel like any physical references to places you make will warm my heart and take me back.
Ashley and Sarah have launched a marketing firm that helps people build awesome brands. Previously, they were early at Foxtrot, which many of you may have heard of. They helped build what has become a really awesome brand and an interesting business model in the convenience and delivery space. So in y'all's words, what is Foxtrot as a starting point?
Ashley Alden: Yeah, so Foxtrot is a modern convenience store that has retail locations as well as on-demand delivery. We usually promised under an hour, and there are now 25 to 30 locations across multiple cities. When I started at Foxtrot in 2018, we had four locations in Chicago, and the business model was split about 50/50 between retail and delivery. By the time I left, we were at 25 across three cities, which was a really fun ride to build.
But the brand itself was really all about discovery. It was all about new brands, local brands. We always considered ourselves as a launchpad for emerging brands to get their story out there and get their products into a customer's hands. We spent a lot of time telling the stories of those brands across the Foxtrot channels.
Ashley Alden: For me, I lived in Lakeview near Southport and Belmont. I was walking down the street one day and there was a Foxtrot that was under construction. I had never heard of it before. I looked it up and it seemed like a really interesting concept. I had previously been a buyer in apparel, so I was looking for an interesting role. I never considered grocery, but because it was really trend-focused, it was interesting to me. I met with co-founder Mike, and he sold me on the concept. I sold him on the fact that if I could buy men's jeans, then I could buy food too. I was employee number nine, so it was super early days. Prior to me joining, Mike had been choosing the products on his own, just by having amazing taste. I really put a strategy behind what we were choosing, and the rest is history for me.
Sarah Sitz: For me, I came on as employee 15, I think is what we say. I had historically been at midsize companies, but always rooted in technology. I worked at Grubhub and Seamless, when they had merged before the days of DoorDash and Uber Eats, then went to Cars.com, and then Foxtrot. I just walked in one day and was like, this place gets me, and I wanted to be a part of something that I could see myself in as a consumer. It was exciting to feel like not only was I passionate about what we were selling, but that I was the end consumer as well.
Ashley and I both spent around four years there, and it was a super exciting time building the brand from series A investment to series C, from one or two stores to 23 by the time we left in four different markets. We learned a lot along the way.
Sarah Sitz: The ethos of Foxtrot was this whole idea of curation and discovery. It was a place, a destination, not only as a modern convenience market, but a place where you could really find what was new and fresh within the food and beverage market. We were super passionate about food changing the way that people ate and drink, and being on the precipice of what was new and next from a cultural standpoint.
What was really fun, especially as a brand marketer, is that Foxtrot really believed in investing in brand with a capital B. We really put the energy and attention into not only what we stood for, which was reflective, but within every product that we picked, how we talked about ourselves, whether from a retail perspective or in the partners that we chose. We were just super thoughtful and protective of our look and feel, and we made sure that as we grew, we didn't get diluted from what we stood for.
As we started to build our own brands and hundreds of private label brands with an umbrella, we used that same principle. Whether that was an own brand, a partner brand, or one that didn't even have the Foxtrot brand, we would always start with strategy first and make sure that we were super aligned to what our path was, and then our projects would fall beneath that.
I think a lot of brands that are growing tend to fall into two buckets, right? Really brand-led businesses and growth-led businesses. One is not necessarily better than the other. In our case, we were a brand-led business that focused more on how we organically grew than on growth hacking. It was fun to be a part of.
Will Schreiber: I'm curious if at any point there were learnings about where the brand needed to change or shift from the early days. I remember when Foxtrot first launched, the focus was very much around convenience and speed. It felt like the brand became more about curation, which you're talking about. I'm curious if there were ways you guys could identify where you needed to take the brand and how you settled on what it ended up becoming.
Ashley Alden: I think the delivery space became very crowded very quickly, especially with COVID. So it was really the differentiator for us. We had all of these products that other delivery services either couldn't offer from a logistics standpoint or hadn't found yet. That's why we really leaned into curation and discovery versus speed. I think that's something that any brand can really start to think about and use. What are your differentiators? There's always going to be somebody with more money than you, with faster technology than you. What are the differentiators that no one else can do? In the case of Foxtrot, what no one else could do was discover these amazing brands and products and then tell the stories in a way that made customers want to come to a convenience store as a destination.
Will Schreiber: So if you identify like, here's our unique angle and here's what we're doing that's different than everyone else, how then do you think about or what frameworks would you use in executing? Okay, what is the brand and how do we build it? If we know this is our differentiator, how do we express that?
Sarah Sitz: I think there's an art and a science to it. Some of it is just gut. We were like, this feels like us. This is a worthwhile investment. There are a lot of trips along the way that were really bad calls and weren't opportunistic for the business. It's a blend of using customer data, social engagement, and how people are talking about us, but also what were people buying, purchasing, and gravitating towards, and knowing where to double down.
From honoring your DNA, I think it's just how you kind of keep building your own lane, right? There was a million other people in the market doing something similar, but we always felt like we're building our own and tried to put blinders on. When people ask who's your competitive set, we're like, everyone and no one, right? It was every single coffee shop at every corner and every single delivery service. If we got caught up in what they were doing, then we never would have been building our own path.
I think it's about staying true to the heart of what you've built and what feels right for you. You start to know, right? Like when you get the ick on something and it's just not right for your business. And then the things that innately everyone's excited to work on and feels right, that usually translates to customers too. When it felt forced, we were like, this isn't going to move the needle, and no one's going to be excited about it. So you just put pencils down.
A good example is we piloted a program called Up and Comers that celebrated the next generation of business owners on shelf. It celebrated uniqueness, everything from packaging to your unique story angle, and really just celebrated the heart of what Foxtrot was. We started to build more credibility for something that we were always doing, but then defined it through a marketing and branding perspective. That has gone on for four or five years to become a branded product that people look out for. So it's a lot of trial and error and just trusting your business and your customer.
Ashley Alden: Yeah. On the revenue or data side, what we would do on my team, the merchandising team at Foxtrot, we would dig into sales data on a weekly basis. What we were finding is that regardless of the category, new emerging brands were popping to the top of our category rankings. It was very clear that customers were coming and buying these products that were new to the market, even if they were more expensive.
We carried late Doritos and several brands you'd heard of, but what was popping was the latest chip on the market or the most interesting flavor of ice cream from Jenny's versus even Ben and Jerry's ice cream, which wasn't selling to the same level. As we started to see that trend in the data, I worked really closely with Sarah's team, the brand marketing team, to start to really elevate those stories of new brands coming to the market. Then we just saw those sales increase even further. So we took data we already had, found what was working, and in the case of Foxtrot, it was unique new items. New items were driving 10 percent of the total volume of the brand. We just told those stories.
Sarah Sitz: One thing I would add is I think we love to press really hard for exclusivity too, right? When the team was negotiating shelf space, we wanted to be the only destination for things, especially in the culture of LTOs and people wanting that exclusivity piece. We would really market the hell out of that to say, even if our own exclusivity window was a month, it was like, we had a month for that runway and we were excited to say, start here, go anywhere. If Whole Foods was secretly shopping at Foxtrot, we're like, that's great. We would love for you to start here. Then five years from now you're at Target because we are your foreground. We could give you 10, 20, 30 brands that started on Foxtrot shelves that are now in mass retailers.
This idea of being able to be the place that new brands start to find their footing helps build that organic relationship with those brands because there was a gratefulness on both sides. It feels right for both of us. And so then our customers would see that too, in how we talk to them.
Will Schreiber: I'm curious if you were to come to us and we were running a meal delivery business and we were left wondering what really helps us stand out, what would be the steps you took to help us identify that and figure out what we really needed to lean into?
Ashley Alden: Usually what we do when we work with brands is we look at the category they're in and the competitive set. Who else is out there doing something similar to you? What are they saying their differentiators are? Just go down the list. Speed, type of product, price, promises you're making, gluten-free, non-GMO. We like to see where you're standing out from them in that set.
We also set up what we call a T-chart. On the vertical axis is usually price, and on the horizontal is level of innovation. We plot you versus everyone else and see where is the white space that can really help when you're starting to think about positioning yourself against the competitive set. I usually do that work up front as well as dig into your data to see what's working and what's not. Then I pass the torch to Sarah.
Sarah Sitz: Yeah, so the first part of our process is understanding what's the business and market opportunity, right? So that's a blend of the category itself, your audience opportunity, and market conditions. Like inflation right now, like what are people willing to spend? We think it's an important exercise to optimize your brand to make sure that opportunity, that white space circle, is big enough for you to own fully.
Once you've landed and you're sitting where you are on the axis, then you start to think about how do I talk about myself? What makes me unique? And that's where we do a lot of work on finding your unique selling point. Everyone has a different name for it, whether it's mission, vision, values or something else. But really unearthing your reason for being and what you're uniquely bringing to the table.
We line it up to say what guides you internally? What brings you to work every day? And then how does that make you slightly differentiated in the market? What's the thing that you're going to say that makes somebody feel like I'm going to choose your bagel over the guy next door? Once you've really landed that positioning, then you can start to build an optimized brand identity that goes back into the white space to line yourself up against everybody else and make sure it doesn't look and sound the same.
To that point earlier about trusting your gut, like in most of the cases with people on this call, you are your brand in some ways. Your brand is a reflection of you. So live that through your tone of voice, your content every day, and what you bring to the table in how you interact with your customers. That's essentially a marketing tactic and tool.
For us, we spend a lot of time talking to clients and they're like, can you just figure out a go-to-market? We're like, sure. But do you fundamentally know what your brand is? Do you know where you're sitting? Because immediately you always end up doing that work anyways. You have to go back to the driver because a lot of people can't tell you in three sentences or less what they stand for. We press on that because you're so close to your brand too. We just provide a little bit of that unique point of view to say, step back for a second and really think about what you're building. Then the marketing starts to trickle from there because it's easier to talk about your brand when you know who you are. And that could change over time too, right? Like the Foxtrot example, they were an alcohol delivery service first and now they're an omnichannel marketplace in four different markets. So it's okay for that to evolve and change based on what you're seeing from your customers.
Will Schreiber: You made a comment like you should really focus on two channels. And I'd imagine that the brand direction and mission, vision, values you pick will influence the channels that you choose as well. So I'm curious about your reasoning behind that comment to lean into what's working and focus on two. And how do you even know that those are the right channels for what your brand stands for?
Sarah Sitz: I think for us, right, even for our business that we're building, we started six months ago and we were like, Instagram? We're not the people that are like, super active on social media. We don't feel comfortable. But as we started to get to know our audience, we realized they want to hear from us. They want to know how we think, who we are, and why we're credible. Immediately we couldn't avoid it anymore. We were like, we got to be on Instagram because that's where our clients are, our potential opportunities. We need to be a part of this.
For us, our two channels are LinkedIn and Instagram, right? But really that's where we invest our time and attention because that's where we know our audiences and we've seen the best responses and bounce from. For other people, they might love email, right? But we just cannot take that on right now because we know we won't do it well. So I think you just have to find a blend of where have you seen inroads? If you've done that work up front on your market opportunity, where is your customer, right? And then really thoughtfully think about how you can make those two channels work harder for you.
We are Google Doc gals. We have a content calendar now. Even for our business, it's just two of us, but it helps hold you accountable too. Because we would always say, oh, we're going to post today. Something innately we see from our clients all the time, operationally, is always going to take the front seat over your marketing. I think when you have a plan and you stick to that plan, then you start to feel like, oh, I'm nurturing this thing, and then you become good at it. And you're like, okay, this is where I'm supposed to be. Or you'll be like, hey, I'm not really seeing the feedback loop I'm wanting to hear. Maybe I need to shift my attention to another channel or another opportunity that might be better for me and my business today, where my customers tend to be.
So it's like a little bit of tinkering to see what works and what doesn't, but also that commitment to focusing and just not doing everything. We always say like progress over perfection. Just do the thing. It's okay if it's not tied in a bow. Our example is like I posted a real and a thousand people have watched it and I'm like, oh God, I would have done it so differently now. But I'll use that in the future to guide the next piece of content I create. It's behind us now. It's more of a positive, oh, we can reach a thousand people. Let's take that as a win.
Will Schreiber: Were there any interesting things about marketing at Foxtrot that surprised you in terms of what worked and what didn't?
Ashley Alden: What worked for us were partnerships. One partnership that was super surprising was we did a pop-up shop in partnership with Wilco, which is a band out of Chicago. They were launching a new album and we were just big fans and reached out to them. We did a partnership for no cost. They didn't ask for anything from us. What we did is we took over one store with specific products for them, a non-alcoholic beer, a merch line of t-shirts and hats, and cereal because they were huge fans of cereal for some reason.
We saw a huge response and sold out of all the products online within a few days. Both to a national audience as well as local, and hit a net new customer base, which was really surprising. Such a big name didn't need us to pay them, right? It was very organic and it just came alive in a really authentic way. We had a line out the door of our store before it opened. I think we opened at three o'clock and there was like a line down the block. All really fun and exciting things. And something like that was much more successful for us than paid marketing spend. We could never crack that at Foxtrot. But anything that was really organic and exciting, like Sarah said, if we as folks inside the brand were really excited to talk about it and create it, then our customers gravitated towards that.
Sarah Sitz: And I would add to that example, we got hits in Rolling Stone and AdAge. For us that was a huge inflection point of us being a local brand that could outkick our coverage nationally, right? So you can only shop us in a few markets, but you're getting the attention of national publications. There's value still, right? If you hit it well, you're still going to get that reach that you're looking for without having to be everywhere, right? So for a lot of the folks in this room, you could be just in Philly, right? But you're doing something cool enough that everybody else in the world wants to know about it too.
I think to Ashley's point, we always kept trying paid ads and we always say other companies I've worked for always had that one kind of ugly ad that hit, like at Cars.com it was this minivan and it's so ugly, but for some reason it converts, right? We, every brand I've worked for always found that secret. We just honestly went through different agencies and people owning growth, but paid pages never converted for us. The CPAs were so high that we just couldn't validate the investment there. So we just kept shifting our attention to what we call now a community-focused approach to organic marketing that felt more true to our brand. And we saw that translation that was both high engagement and high revenue driving, which is like the perfect marketing moment when you get both.
Will Schreiber: I know this is a theme you really touched on, this idea of organic growth and building community. You obviously just threw out a bunch of ideas, but I'm curious if you all were to distill what that really means, organic growth, how you might measure it, and what are the objectives in terms of building a community or how you think about it when you build a brand?
Sarah Sitz: I think it's dependent on the brand. Brand metrics tend to be soft, right? It's like brand awareness tracking, which you can hack different ways. You can use that through social engagement. I would say social reach is like of the past. I don't care if 10,000 people are following you. I'd rather have 500 highly engaged people that love you. I think it's you just start to see a pickup of things. You can actually look at search from like a more organic standpoint, right? Like from something you're doing, did you see an increase to website traffic from an activation, right? So there's a way. Or like email capture is an easy way to start to build a harder KPI against a softer brand initiative.
I think you can make them channel-specific and then more broadly if you own a store, like your retail traffic, inbound inquiries, things like that, you can still make them measurable. You just start to see the translation in the amount of more inbounds that you're getting and the new customer set, right? If you max out on moms, right, and you want more like young Gen Z, you just start to see that shift of the type of people that are talking to you too. So it's not a great answer. It's I think there's a blend of both soft, just understood feeling and then direct attributable goals.
Ashley Alden: I've always been a fan of just looking at your total revenue, right? How is that growing and attributing your marketing to that? Like we can look at email conversion, number of followers all day. But at the end of the day, we're all here to grow our revenue. That's the first thing that I would look at as a business owner.
Will Schreiber: So if paid ads were never a success at Foxtrot, at least when you all were there, what was the cause? I do think the main similarity with Foxtrot and a lot of businesses listening is this idea that it's hyperlocal. There's a connection to the community and trying to build relationships with people around you. So I'm curious, like how did Foxtrot think about engaging the community or drawing people into the brand if paid didn't work?
Ashley Alden: A lot of it was in the products that we carried, right? So we were huge advocates of supporting local brands or local chefs and businesses in whatever market we were in. So before we would launch a new market, myself and my team would go out to the city and find whatever we could—local bakeries. We would talk to restaurants in the space to see if they had an idea for a sauce or some sort of product to get it out to the market. Then we would use those community ties, found restaurants, brands, et cetera, that people already loved in whatever city it was, and then put them on our shelves so that people would organically want to come and shop and discover other products there as well. We would work closely with Sarah's team to accentuate and tell those stories in a bigger way. That was really our differentiator from speed of delivery or number of products on the shelves. It was items that you couldn't find anywhere else that were very much tied to the community that you were in.
Sarah Sitz: We spent a lot of time drumming up anticipation and demand, especially when we entered the market. We were like, who else can we get in bed with? We had weeks of events for store openings. It was like local artists that were doing live installations or customizing like the back of a denim jacket in Austin, right? Like really thoughtfully about who we brought into the store for the weeks that we were there. So we felt like we didn't just show up, especially in markets that we weren't organic to. We were already innately embedded in the community because we were with your people that you knew and loved. Because we did our work, and we did a lot of, especially with like product launches within our shelves, we spent a lot of time building up that anticipation and demand. Like something is coming. Why are you interested? Get you excited, drop the thing, and then make a limited run of them that felt like highly valuable.
I think we always like to say is once we got you in, we had so much data on you too to be like, okay, we got you in as a wine shopper. You were extreme, way higher value to us than if we got you in as like your prepared foods program, because you were much more likely to spend more within our shelves and spend more often. So if we got you first as a wine shopper, we'd be like, okay, why don't you buy a gift? Now you've got the bottle of wine, right? And we started to think really thoughtfully through our customer journey and how we hit you when, whether that was date-partying or who we featured. We had such a loyal base that knew those that loved us were obsessed with us. So when we could launch products, they would follow us because they trusted us. We built that relationship where they're like, well, Foxtrot says it's good, so I know that it's going to be good. I'm going to buy this thing. I don't have to worry that it's going to be the first time I'm trying something and it's not going to be good. So I think like that trust with your community, that then they can follow you for where you want to take them.
Will Schreiber: How long do you lean into something in terms of a new channel before you decide it's time to move on?
Ashley Alden: I think it really depends on your customer and how often you are expecting them to find you in whatever channel that you're in, right? So it goes back to data. At Foxtrot, we knew that customers, our power users, would come into our store twice a month. That's how often they would shop with us. So to talk about something for only a day or even a week was not enough time to ensure that customers, even our power users, were actually seeing it. So we found that you have to repeat yourself and you have to spend more time talking about the same thing than you really want to. You are very close to your own brand and what you're saying, but not all of your customers are seeing every single point of communications or on every channel like you are. So it's just something to think about as you're building these plans and working through channels. Give yourself more time than you think and base it off of how often your customers are coming to your channels.
Will Schreiber: Yeah, and I think the fact that power users were coming twice a month is really interesting because too often in the meal delivery world, I think we all beat ourselves up about if someone's not ordering every week, right? And it's almost an unrealistic expectation that your customers want or can order that often. And really figuring out how you can engage with someone over the long term in a way that feels good for everybody is a real challenge for meal delivery companies.
Ashley Alden: I think you have to think about the macro environment right now too, right? People are finally starting to travel again and leave their houses and want to eat out. So that's just something we always go back to as well. It's not only what's happening within your own business, what's happening globally to set your expectations.
Sarah Sitz: And I think like we were talking to a client the other day and they were talking about their specials. They were like, well, we're doing this month, that month. We're like, let it just breathe a little. Are you a Valentine's day destination? Do you sell items that people are searching for you for Valentine's day? Right. If you are, like, go for it, right? And that's your initiative for the month. If you're feeling the need to connect with everyone and everything like St. Patrick's day, it doesn't mean your brand has a place there. So I think that goes back to the origin of like really knowing your brand because then you know I don't care that it's March Madness right now because my customer doesn't care. It doesn't matter to my business. And that helps you start to prioritize where you spend your time and energy. Do you say your customer really cares about new year, new you? Like you're going hard come January 1st because everybody wants it, right? So I think it's just using what you know about yourself and somewhere to be like, okay, this is going to be important. I'm going to give this legs. And when we say breathe, like a month to three months, even I think it's the speed of the feed was a lot, but it doesn't mean that people are like, oh, they're still talking about that. Like it's actually at this point you're just, everyone's not watching you as close as you think they are, at least in that way. Yeah, because we see a lot of people with national brands like I need to offer a special promo. We're like, enough.
Will Schreiber: With the last few minutes, I would love to chat about shelf space as well. I think a lot of our businesses want distribution beyond just home delivery or whatnot. As people who both help brands get on shelves and as buyers, what are things that help brands get the attention of businesses like Foxtrot or that would help a brand get the attention of a gym like Equinox and increase distribution across shelves at partners?
Ashley Alden: Yeah, so a lot of it will start with what your product looks like, just visually to grab the attention of a buyer or customer. I would encourage everyone to spend some time with the look and feel of your product. But beyond that, quality and taste differentiators. So what makes the product that you want on the shelf different from everything else that a buyer has seen? That could be the types of ingredients that you're using. It could be the price or the size. I mean, that's really on you and goes back to the positioning that we discussed. So you want to make sure that's very clear in your pitch.
Your ability to distribute will be important as well. And data is going to be really helpful. One thing that I always pushed brands on who wanted to be on Foxtrot shelves were, how do I know this is going to work? How do I know this is actually going to drive revenue at the end of the day? That's really what retailers, gyms, et cetera, are going to care about. If something is sitting and taking up space in their environment, they're going to want it to drive sales. So you can use stats from your own DTC site. You can use stats from another retailer or an e-commerce site. If you don't have stats, then you can use customer reviews. You could use some social proof to showcase why you think your product will work.
And last but not least, you want to provide support to make sure something will work. When you're talking to a potential retailer or potential client, you can talk through, I'm going to come in and sample X number of times a week and you can tell me when you have the highest amount of traffic in your location and I will be there. Or I will provide a promotion for the first two weeks. Sometimes we, as buyers, we would ask for a free fill, which is you provide free product the very first time you drop it off so that we're not at risk and you are taking that risk. Now, if you truly believe in your brand, then you would be willing to throw that out there and prove that you can drive revenue for the buyer that's looking at your product.
So there's several different variables, but at the end of the day, it's look, what's different about the product? And proof that it's going to drive revenue. I think those would be the top three items to consider. And you want to tell all of those things to a buyer very succinctly and clearly. I was pitched thousands of times, and when someone would tell me their entire life story, I love it for you, but we're hearing all these pitches all the time. So get to the point quickly and really have your elevator pitch down so that you can tell your story quickly, grab the attention of a buyer, and then tell your origin story and everything else.
Will Schreiber: And how long does it typically take if you were getting into Whole Foods, it's a long drawn out process, but are there like tactics or tips for even figuring out who to get in touch with? Like, who's typically doing the buying? And if you're getting so many inbound emails, what are some unique ways you've seen people try to stand out? Or is it just write a great email?
Ashley Alden: That's a great question. It really is going to depend on the retailer, right? So Whole Foods has a full process that you have to apply to, and even Foxtrot has gotten to that point because the inbounds were so high. You can go into a mom and pop store around the corner and you can just talk to the owner who's probably also at the cash register. It really runs the gamut, right?
I would utilize LinkedIn to find who is the buyer that you're trying to talk to. I would show up at events, whether that's trade shows or community events. And I mean, in my time at Foxtrot, I had someone sell me a cookie out of a Ziploc bag. It was delicious. We made it happen, but they found me live. So you just have to really get yourself out there.
Also, Sarah mentioned this earlier, a lot of buyers are competitive shopping, right? So if you can get on the shelves of an Equinox or a gym, right? Or a mom and pop market and look really interesting on the shelf, that buyer may find you. So don't be afraid to go after small independents as a way to build up your brand visibility. Because that's the best way that you can get on a shelf is if a buyer finds you. It's like a little Russian doll of buying, you know? Start at the small one and try to work your way up.
Yeah, 100%. And like we've been talking about, amplify your brand in your own channels. So whether that's social or email or your website, you want to just be as visible as possible across a number of channels.
Will Schreiber: What are the margins like on, like if Foxtrot, what would Foxtrot buy or want to buy a meal for if the price was normally 11 bucks sold at retail?
Ashley Alden: So our target margins were 40%. That's pretty high for the grocery world. I think typically 30 to 40 percent is closer to where folks would want to be. But I would just target that in your mind. And one thing that we've told a lot of brands is when you're thinking about the price that you want your customer to pay, you want to actually think about what they would be willing to pay. You don't want to start with what your cost is and then build the margin on top of that for the retailer.
In most cases, you're going to be priced out of the market and you're going to be too expensive. You won't ever gain the momentum that you need. So you really want to think through. Look at your competitors. What are the prices that are competitively out there? What do you think your customer would be willing to pay? If you're higher than them, why should they pay more? What's the reasoning? Are you clearly communicating that on your packaging? And then once you've set that, you can always go back as you scale and reduce your costs.
As you get larger, your packaging can be less, even your ingredients cost will be less. But we always tell brands it will be 30 to 40 percent margin that your retailers are going after. But don't just base your price off of that cost. It's never a good recipe. And customers always are so much smarter than you think. They'll know.
Will Schreiber: Just asking, did Foxtrot or how much did Foxtrot really experiment with ads versus it being organic and sharing a story of like articles floating around that Olipop grew organically, but also had tens of millions in funding? So questions like how realistic is it like organic works because there's paid spin behind it?
Sarah Sitz: I mean, here's the thing. It's how you're defining success for you too, right? I think organic and paid go hand in hand, right? So you start to see what's resonating organically. You use it as a testing ground, right? Maybe your first real or piece of content gets your highest level of engagement. Try boosting it, right? See if that gets you incremental conversion first. And then if that ad that's working, then turn it into an ad. I think it's just like they play together, right? Use your organic feeds as a testing ground to then funnel things into paid, just not throwing dollars at everything.
Also, you can build test models against yourself and paid and see which one you're getting better returns on. I'm not like, we're not anti-paid. Like I think there's a place for it also. I think it's just dependent on your category too. And for us, to try to play in a paid space against delivery was just like, we're never gonna win that game. So it's like, it's right. And it's like a blend of the right messaging, the right creative, the right category, the right time, the right customer, and then that winning speed of as you run.
So it's not that it doesn't work or there isn't a place for it. It just didn't for us. Like we could never fully crack it enough to say let's double down and allocate incremental budgets. Like we would always pull out, come back in again, because we didn't like our strategy never fully landed and we didn't have that winning yet. But it didn't mean like at other companies that I've worked for, that isn't a place that we don't have partners that we work with on a paid perspective. Like definitely a great channel to get more eyeballs on you as you grow.
Will Schreiber: Yeah, and I think to translate this a bit, I think it's easy to look at even a smaller meal delivery business in one market versus a Foxtrot that feels like it's really big. But to Foxtrot, DoorDash or the world is huge, right? And like far outweighs them. And so I think there's an interesting perspective that actually everyone's in the same boat of ultimately competing against the national hundreds of millions of dollars backed major players. And I think that's where the similarities are really interesting of what y'all are saying about really thinking about the brand and community building is going to be how you acquire efficiently versus trying to compete with a DoorDash ad spin.
Ashley Alden: Yeah, totally. I mean, regardless of the category, there's always going to be someone who is national and has more dollars to spend on paid than you do. So it's really about figuring out what makes you different and unique, building a community around that to grow.
Will Schreiber: Well, thank you all both so much for the time. I'm glad we got the video rolling. This was really interesting. If anyone would like to get in touch with Sarah and Ashley, reach out and we will put you directly in touch. But they can also be found online. We will include a link to their marketing firm when we post this. Anything else in your closing thoughts?
Ashley Alden: So you can also, we're working to grow our Instagram, so I'm going to put it into the chat for everyone to see.
Will Schreiber: Perfect. And we will be sure to include both the link to your website and your Instagram in the follow-up email that we send with a link to this. Yeah. Thanks everyone for joining. Hope you got a coffee this morning and got some value out of this. This was really fun. Thanks, Ashley and Sarah.
Ashley Alden: Thanks everybody.
Will Schreiber: Have a good one.