Interview with Robert Craven
Learnings from 20 Years in the Natural Products Industry
In this interview, industry thought leader Robert Craven shares his perspective on the foundational pillars of the industry, as well as the meaningful change that has occurred over the last 20 years and his advice for how brands can navigate through it all.
Industry thought leader Robert Craven has spent over 20 years working for and with natural products brands, formerly serving as CEO of MegaFood, NewOrganics, and Garden of Life. Today, Robert is Managing Partner and CEO of angel investment platform, Findaway Adventures, helping accelerate young, impactful, consumer packaged goods companies. Netrush also has the pleasure of Robert serving as one of our strategic advisors, and I enjoyed connecting with him on the natural products industry before heading out to Expo West.
Claire: What do you think is the most defining characteristic of the natural products space?
Robert: The foundation that the industry is standing on largely started with hippies in places like Northern California and Asheville, North Carolina. The granola movement, if you will – classic health food stores, bulk dry goods, organic. So, I would say that the vein for the natural products industry, the root of it, goes back to that.
The most successful brands that I've seen in the space connect to that vein in some way - which I would describe as more passion and energy around changing the world and improving people's lives over just making money.
The focus was on creating what Michael Porter calls shared value, which is economic impact plus social impact. The really early founders put social impact way above economic impact. The early health food store owners weren’t really in it simply to run a business. They didn’t do it for that reason. It was more about their own health and wellness problems, or those of a loved one, and then that birthed the store or brand.
Claire: Do you think most brands are living that out still today, or have we gotten away from that foundation?
Robert: There are a lot of brands that may or may not stay true to the foundation. So much money has flown into the space in the past 10 years or so which has changed some things. But I believe the brands that stay committed to social impact in addition to economic impact, to doing big things and changing the world in a positive way, are the ones most likely to succeed.
Claire: Any favorite brand examples of that?
Robert: I think Dr. Bronner's is a good example of that commitment. Gaia Herbs also comes to mind. All the Findaway investment companies exhibit this in some way. For example, Hustle Clean launched a 501c3 that supports underserved communities with athletic equipment and Holmes Mouthwatering is committed to using their platform to teach entrepreneurism to those that might not get that opportunity otherwise. There are still many brands out there that stay committed to social impact and it shows in all that they do.
Claire: What else are you seeing in the industry today that’s maybe a big shift from when you started?
Robert: I've been in this industry specifically for about 20 years, almost 22 years, actually. The amount of change that's happened in the last 20 years is crazy.
One of those changes that I'm really interested in is all the convergence going on in the industry. There's a convergence around technology. You’re hearing all the new “tech”, like HealthTech, FinTech, RetailTech.
My interest is what I’ve been calling CPGTech – how technology can affect the consumer interaction with a consumer packaged good. I think we're at the very front end of that. I'm seeing some really unique and exciting technologies that can enable a deeper, more satisfying consumer interaction with a product and there is going to be a lot of examples of that moving forward.
Claire: Can you share one of those examples of CPGTech? I think a couple years ago that meant a lot of CPG brands were trying to develop their own apps, which didn’t really work at all. Today, convergence is often leading brands to invest a ton of money into the ecommerce marketplaces. But you may be thinking a bit bigger and forward leaning than that?
Robert: I've seen very few brand-driven apps that provide any value to the consumer. I think most brands aren't picking the technology based on the consumer value it can lend – they’re doing it based on its cool factor or what the brand can get out of it.
A good example would be a new technology called Digital ID. It's basically a 25-cent microchip technology that gets embedded in the label. So instead of having to scan a QR code, you can literally just wave your phone in front of the label, and it could give you lots of options. Maybe you could manage your subscription easily, you could get recipes, you could recommend it to a friend, you could give a review of the product, you could see a video from the founder, and so on. The other cool thing about the technology is that it allows you to track where the consumer is buying from, if the consumer is willing to play along. For the omnichannel consumer that sometimes buys at Walmart, or sometimes at Amazon, it's a wonderful way for the brand to keep up with that consumer and offer more value. That's one that I love.
Another example is the Findaway investment company, OK Capsule. They provide the back-end software and services needed for any brand to offer a personalized supplement pack experience. Their technology can really support an enhanced brand experience with their customer. We are also invested in a company that offers an in-home urine analysis that tells you where you’re deficient across about 14 different vitamins and minerals, and then the app can immediately recommend the supplements you need that month and offer to deliver them in two days. To me, that's a great example of that tech convergence – in-home labs followed up by supplementation, and we're seeing that with food, we're seeing it with custom blended powders, and this vitamin and supplement. example as well.
Claire: These are some awesome examples. Is this convergence all good, or is there any bad to it in your mind?
Robert: I would say the convergence is good on the one hand, because it’s bringing a lot more money and a lot more eyeballs into the space, but it can be bad because, for a young brand, where do you focus to get your first toehold? I see a lot of brands get spread way too far out and try to be all things to all people. That makes it a little harder to get your toe hold.
Claire: How do you advise brands to manage that?
Robert: I talk a lot about a guy named Kevin Kelly who wrote a great article called 1000 True Fans. He likens it to music – it’s that local musician that you love, you buy everything and go to all the shows. A lot of times, entrepreneurs create a product for themselves, and it makes it much easier to go find 1000 true fans if you focus on yourself and why you created the product. So really honing in on that makes your marketing easier, makes your pricing easier, makes it easier to get a toehold.
And staying focused and keeping it simple in that way means you have to say no. The biggest thing I see that is killing brands is they get spread too thin and they say yes to too many things.
And using data to help guide the focus is also key. One of the first investments we make in a company is taking some of that capital to buy data. So, we get at least a balance sheet of the market, and then we work with Netrush to get some good Amazon data as well. I think the data is crucial and data helps you make better decisions. And the smaller you are, the better decisions you need to make because the risk is so high.
So, we understand the data first, and then we have your 1000 true fans recommend the next product launch. Let your fans recommend your next big thing - truly engage with them and they will help you lead your brand’s growth.
Claire: It’s brilliant to have your consumer recommend that next product launch. Do you think most brands are thinking about the consumer enough?
Robert: We have eight steps in our strategic mapping process. The first one is ‘know thyself’. Why did you build this company? What are you trying to accomplish? The second step is ‘know thy consumer.’ It’s number two for a reason. The deeper you can go with step one and step two, the easier it is to marry the two.
And then the third is ‘know thy market.’ I call it the planets that orbit around the sun, and those first three are the inputs into why we exist as a company, which is the sun, and what everything revolves around. I like to get as much data as possible on all three of those points.
What are consumers looking for today?
Robert: Yadim Medore of Pure Branding has its Supplement Consumer PureSegmentation™ Research that boils it down to six different types of supplement consumers. As an example, you have your biohackers, but then you also have the consumer that just knows they need to take supplements, so they go to Costco and buy the cheapest one. There are all kinds of different consumers, and what they’re looking for may vary.
In general, if I was to paint a broad brush from a consumer standpoint, the one thing that cuts across all the different types would be that consumers want what they want, when they want it, how they want it, where they want to buy it. So, you know, omnichannel is everything, I think for all the cohorts.
This means that the omnichannel strategy for the brand needs to put the consumer in the middle and give them the kind of brand experience anywhere they want to go - consistent brand experience, consistent pricing, consistent everything.
Another thing I'd say about a lot of the more premium cohorts is that they are trying a lot of new things. They switch easily. I look at a lot of CAC (customer acquisition cost) and LTV (lifetime value) numbers, and LTV is not that long for most of the brands I see. I think that has a lot to do with consumers wanting to try new things. There's so much innovation and so many young companies in the space that it's very easy to try this or try that.
Claire: Thanks Robert, this has been so insightful. Any other perspectives you want to make sure we leave brands with?
The last thing that comes to mind for me, is a blog I wrote called the Squarespace(ification) of Entrepreneurship. Squarespace creates these templates to drop your brand into a website. And I would say that private equity and formal educators or business schools around entrepreneurship have a template that you follow. I see the template all the time. I've seen 350 pitch decks in the last couple years, and I see the template that people follow, that I call the Squarespace(ification) of entrepreneurs.
I wish people would throw away the template and be more courageous to lead with who they are, and lead with what they're trying to do in the world, rather than relying so much on the templates.
I guarantee you as I walk around Expo next week, I'll be seeing lots of little brands that are following the template. I'll start asking them questions about what they're passionate about, and some of them will tell me and they'll gush about it, and I’ll ask, “Where is that in your branding?” It's not in the branding, it's not on the package, it’s not in the marketing materials. And it's because they don't feel enough courage to lead with their story, to lead with their passion and what they're trying to do in the world. They feel like that's a negative because it doesn't fit the template. And so, I want them to throw away the templates. I want them to really get back to the passion of why they're doing this - which for most entrepreneurs I meet, is to change the world.
ABOUT THE SERIESWe’re keeping up the momentum of Expo West 2022 with a limited series all about the natural products industry. Throughout the month of April we’ll be publishing a powerful combination of category-level data, interviews with industry professionals, and expert perspective on the most important elements of the natural products space.
ABOUT THE AUTHORClaire McBride leads research, insights, and education for Netrush. She has spent the last five years helping brands grow and optimize their ecommerce businesses through written research, events, share group discussions, and one-on-one consulting, formerly with Cleveland Research Company before joining the Netrush team.
