ROY:

This was right when brain health was hot, nootropics were becoming a thing, the movie Limitless came out a year or two before. We were lucky to catch that wave.

ALISON:

Hello, everyone. Welcome to the Umai Social Circle, where we talk all things CPG marketing. We are here to help business owners and marketers, alike, grow. I’m Alison. I’m the cofounder of Umai, and today we’re talking about Natural Stacks with Roy Krebs. He’s the cofounder and CEO of Natural Stacks. I still use a lot of their supplements. I actually have CILTEP right here. I take it every morning. It’s like a healthy Adderall. I don’t know if that’s accurate. I take Omega CBD instead of Advil now, a lot healthier. I take their CBD for sleeping. So I’m a huge fan of this brand. Excited to have you, Roy. Welcome.

ROY:

Awesome. Thanks, Alison.

ALISON:

Natural Stacks is an open source supplement company. Can you explain what that means?

ROY:

Yeah, sure. It’s our quality and transparency program, really full visibility of our supply chain. So we created this… It’s a three tier program. When I started the company, I was pretty fed up with just the lack of transparency in the industry. You don’t know where the ingredients came from, there’s no test to validate what’s actually in the products, and then just proprietary formulas which I think are bogus. So we created this program, which I’m super proud of, and I think it gets us a lot of respect and opens some doors for us.

ROY:

And so what we do is ingredient traceability, means we disclose who all of our ingredients’ suppliers are. Every single ingredient, and every single product, we’ll tell you exactly where we got it from, and that’s quite unique. And we do third party lab testing on every single active ingredient of every single batch. And I don’t think anyone does that. It’s very expensive and it’s hard to pull off, but it’s very rewarding to be able to say, “Here’s the supplement facts for this supplement, and here’s the third party test to actually validate you’re actually getting that amount for each compound, rather than just trusting your co-packer.”

ROY:

We actually share all those third party tests online. So any consumer can see those tests for the actual batch they’re holding in their hand. We just started adding QR codes to our labels. So someone can pick it up off the shelf, or if they order it online, scan that and see here’s where you got your ingredients, here’s where those agreements came from, and here’s the third party test to back that up. And then the last thing is just nothing proprietary, full label disclosure. Really, I believe everyone deserves to know what they’re putting in their body. It seems pretty straightforward, but a lot of companies won’t tell you.

ALISON:

That’s very cool. I had no idea about the QR code, so that’s something pretty new. Where did you all get that from, or have you seen some other brands try that out?

ROY:

Well, CPD companies are doing it because there’s a regulation in, I believe, Iowa or some Midwestern state that requires it. But, basically, all the big CBD companies have a QR code on their label that goes to a third party test-validating that there’s less than 0.3% THC in that product. And I saw these QR codes and said, “Cool, we can just make this an extension of our open source program and be able to quickly show a consumer where those ingredients came from in the third party test to back up the [inaudible 00:03:50].

ALISON:

That’s so cool. I really like that. But based on your transparency, is there ever any fear that another company is going to come in and steal your formulas? Do you ever get scared of that?

ROY:

Oh, bring it on.

ALISON:

I like that.

ROY:

We spent a long time sourcing our ingredients and we’re using the highest quality stuff. Even just our ascorbic acid, which is a commodity ingredient, we’re sourcing it from Scotland. It’s a non-GMO source. Our amino acids are sourced from Ajinomoto, a Japanese company, pharmaceutical grade, made from botanical sources rather than hogs hair, or bird feathers, like most amino acids. I know that we’re using the highest quality ingredients. These ingredients are quite expensive. If someone’s going to knock us off, they’re probably not going to want to use these ingredients because they’re going to use the cheaper stuff. And it just requires a lot of work in general. And I don’t think many brands are willing to do that. I believe we have enough brand equity that if someone does completely knock us off, people trust Natural Stacks and they’re going to choose our product over the knock-off.

ALISON:

No fear.

ROY:

Bring it on.

ALISON:

Let’s take it back a little bit. I’d like to talk to you about you, and Ben, said that there was a gap that you saw that needed to be filled with the supplement space. What other motivators made you all get started in this industry?

ROY:

Sure. I had another supplement company before this one and I was working with Ben, so we already had a good relationship. I noticed my own brain wasn’t working that great. I had some brain fog. I was procrastinating a lot. That was probably my biggest problem. Big To Do lists, but not doing much of it. And I wanted to start taking a brain supplement for myself and I didn’t want to use something pharmaceutical. I didn’t want to go to a drug. I wanted to stay all-natural because that’s what I was comfortable with. I started just doing a ton of research. And as I’m doing this, my grandfather got diagnosed with Alzheimer’s and dementia. His degradation happened super quickly. Watching that, and then seeing my own brain not working great, I just took it very seriously and was, frankly, scared and said, “What can I do? What can I take? I want something that works now. I want to stop procrastinating, but I want it to be safe for longterm use.”

ROY:

I looked at what was available for brain health ingredients, currently, for supplements, and there just wasn’t much. There’s only 10 or 15 well-known brain ingredients, ginkgo, gotu kola. There’s a few botanicals, a few amino acids, some vitamins, some minerals, maybe blood vasodilators. I tried them all and they just weren’t that effective. Very well studied. Sure, there are legit studies that back it up, but it’s take it for 60 days and you might have a 5% increase in memory or something. Not something you take and be like, “Oh, dang. I took my ginkgo today. I’m really on fire.” I wanted something a little more experiential. So then I started trying the nootropic blends that were available. These are brain supplements that combined in multiple ingredients, and I just wasn’t impressed. They almost made my procrastination worse, like a scatterbrained effect. I felt something working, but it wasn’t what I was going for.

ROY:

That’s where our concept came in of just creating these very targeted unique formulas that are only trying to do one thing. I realized that the other brain formulas were trying to do it all in one formula. They’re trying to activate mood and focus and memory altogether, when the brain is quite complex and we can’t just blast everything at once. I realized that it makes a lot more sense to target individual pathways in the brain for specific outcomes, and that’s what we’ve done.

ALISON:

Wow. Correct me if I’m wrong, you don’t come from a scientific, chemist type background?

ROY:

No, not at all. I don’t think I did very well in those types of classes. Biology and chemistry were my worst in high school. I was an Econ major in college. I was always an athlete, so I always took supplements and always did my own research to figure that stuff out. And then just the more deep I got into it… I started reading just hardcore medical studies and reading synergies on ingredients, and found some pretty cool stuff that other companies weren’t doing. There was definitely a void in the brain health category, which is a growing category. It still is, but the big brands would release maybe one or two brain products. They weren’t going about it the right way, whereas now we have 10 different brain products that are a lot more targeted. We’re really trying to just own that niche.

ALISON:

Very cool. So for someone who hasn’t done that research, and doesn’t really know any of the terms or whatnot, but would like to find a supplement for them, what type of things can they look at? Should they be looking up the ingredients? What should they be looking for when choosing a supplement?

ROY:

It all comes down to being introspective as much as possible, rather than saying, “My brain is not working great today.” What about it? Is it your mood? Is it your focus? Is it your memory? Is it your ability to sleep and relax? These are all very different things. The farther you can get to pinpoint what exactly about your brain is not working great, the better you can help yourself, I think. A great resource for me when I was getting started was the book called The Edge Effect by Dr. Eric Braverman. He has this assessment, or a quiz, called the Braverman Assessment. You can look up online. It’s very easy to find. It’s a questionnaire that you can answer, and it will tell you which neurotransmitter you’re naturally dominant in and which one, or ones, you might be deficient in at that time. For me, it was very eyeopening, really gave me an understanding of how my own brain worked and, as soon as I had that understanding, it was much easier for me to optimize my mental performance.

ALISON:

Very cool. I think I have taken the Braverman Test back in the day. That’s pretty cool stuff. I could talk about you all’s line forever. I mean everything I’ve tried is pretty awesome. Let’s go back to Natural Stacks, and you and Ben were getting started. What was it like, initially, to start a supplement company? Can you think maybe about one thing, or a turning point, with Natural Stacks that made you realize, “Okay, this is going to be a success or something to stick to”?

ROY:

We knew we had something almost immediately. We launched with two products and then went on to the very niche bio-hacker podcasts. And that was basically our launch strategy, was to go on, use influencers and their podcast to leverage their audience and get them introduced to our brand pretty quickly, give those influencers an aggressive affiliate cut to get them motivated to talk about us. And what we had was unique, so they wanted to talk about us. But really, within those first two weeks, we got on to a podcast and I think we were profitable almost immediately. Really, after the first month we were like, “Wow, okay, we got something. Let’s take this seriously and try to grow it into something a lot bigger.” We did $100,000 in our first 100 days.

ALISON:

So your main strategy was to get in front of as many audiences in your niche through podcasts. And then how did you find influencers?

ROY:

We just sent cold emails. Cold emailed to Ben Greenfield, cold emailed to Dave Aspery. They were very receptive. And that was really it. We had something that was unique. We had this nootropic product, CILTEP, which now we’ve actually rebranded into the name called NEUROFUEL. At that time, CILTEP was developed in this almost community-sourced way, in these online forums, where it was really a couple of years of people tinkering with the formula and trying it for themselves.

ROY:

By the time we came to market with it, a lot of hardcore nootropic bio-hackers have already heard of the formula and some of them were making it themselves, but it was hard to do. You needed a milligram scale, you looked like a drug dealer because you had all this weird capping equipment, and it wasn’t a very good experience. So only the hardcore people were doing it and putting it into a nice package, made it easy to distribute to a more regular audience, and Dave Asprey and Ben Greenfield and Tim Ferriss, and those guys… Brain health was hot, nootropics were becoming a thing, the movie Limitless came out a year or two before. We were lucky to catch that wave.

ALISON:

I mean it’s pretty crazy too. The names that you just spit out, Tim Ferriss, Dave Asprey, and I can’t imagine now cold emailing, or cold calling, one of those guys and them even responding.

ROY:

I think it was a little easier back then, at least for them, but there’s always that opportunity. There’s always up-and-coming influencers that are very receptive to talking to folks that have something new and exciting. So I don’t think that strategy’s dead, I think it’s still very alive.

ALISON:

And did you all offer anything in return, or was it simply a try my product, here’s what’s inside?

ROY:

It depends on who you’re talking to. You have to be very flexible and listen to what they want. Sometimes it would be a straight-up affiliate deal, 15% of whatever you refer. For Dave Asprey, we offered him a great deal for him to sell the product on his own website. He was very receptive to that. For other influencers, like the poker champion that we worked with, we gave him a percentage of sales on our entire website for a certain amount of time after the tournament aired on ESPN. You just have to be flexible and make a deal that makes sense. And all those deals didn’t require any upfront money on our part. Putting the risk back on their side and say, “If you can produce, then you’ll get paid. But if you don’t produce, then it was fun anyways.”

ALISON:

Wow. What was the poker player’s name again?

ROY:

Martin Jacobson.

ALISON:

And did he just wear a Natural Stacks shirt during that game?

ROY:

He wore a patch. It was a patch that said Powered by CILTEP. That was an interesting one. He just reached out to us two weeks before he was sitting at the final table for the World Series of Poker, and it got lost in our inbox and we didn’t see it for a while.

ALISON:

He reached out to you all?

ROY:

Yes.

ALISON:

Wow.

ROY:

He had been taking our products and was a fan and said, “Hey, I’m sitting at the World Series of Poker. Do you want to sponsor me?” Now, I think he wanted something crazy, 40,000 bucks or something, to wear a patch. And we were like, “No, we’re only a startup. There’s no way we can do that, but we want to figure out how to work with you.” That’s when we worked this creative deal that, “You’ll wear a patch that says Powered by CILTEP,” and we made the patch aggressively large, which worked well. He ended up winning the whole thing, which was just amazing.

ALISON:

Did you all have any idea that he was going win?

ROY:

No. He came in and he was ranked eight or ninth. So he was a huge underdog. And we were there in Vegas, watching him, which was a ton of fun. His competitors were drinking fruit smoothies and stuff halfway through these long, 12 hour poker days. And he was popping CILTEP and krill oil, and his concentration, you could tell, was well above his competitors. And he just came through and won. It was super cool, a lot of fun, some great shots on ESPN closeup with our patch. It’s hard to quantify the actual sales that we got from that. It’s not tracked or anything. It definitely had a boost, but maybe wasn’t as big as we were expecting. But because we set up the deal in a way that he was getting a percentage of sales after it aired, there was really little risk to us.

ALISON:

Absolutely. I love that. You’re putting it in the influencers’ hands and making them work for you, instead of the other way around. It’s pretty cool. Another question I wanted to ask, are there any… Because I think that you guys are so innovative, so I wanted to ask you, are there any brands that you have your eye on that influenced your brand, or you, in general?

ROY:

For me, I look up to the really high quality supplement brands. This goes back to our ethos of being open source. I look up to the guys who are doing a lot of testing, who use the highest quality ingredients. So Thorne is one that comes top of mind. They recently purchased WellnessFX, which is the biomarker, blood tests and other testing. And so they’re creating this whole ecosystem of test your biomarkers and then fill in your nutrient gaps with their high quality products. And I think that’s super cool because they’ve actually pulled that off pretty well, and definitely have a lot of respect to them.

ALISON:

And what are your thoughts on, it’s important to follow your competitors closely, but you also want to stand out. So how do you manage that balance?

ROY:

We prefer to be the trendsetters. We’re not waiting to see what competitors are doing and then following. We want to be the innovative products that come first. And maybe it’s a little more risk. You don’t know if the market is quite ready for it. We’d much rather be a first mover than be a second mover. We don’t really watch competitors that closely. Of course, we do and we see how they’re pricing stuff and where they’re distributed. But when it comes to creating our products, we’re always trying to innovate first.

ALISON:

I like that. Well, let’s talk about your team and how it’s grown throughout the years. I know initially… This is a two-part question, I guess. You guys only went with e-commerce for the first couple of years, then moved into retail. I’m guessing your team could stay pretty lean until you started to build out the retail component. Walk us through… How does that look, building out the retail side?

ROY:

Well, each distribution channel definitely has its own challenges and requires its own expertise. Starting off online only, which we did for a couple of years, you can definitely stay very lean. I mean to start, it was just Ben and myself doing everything. And then I think we brought on an intern, and I think we just overworked him. He ended up quitting.

ALISON:

Did you pay him?

ROY:

We did pay him.

ALISON:

Okay, good.

ROY:

And now he’s quite successful, so it’s great to see that. Growing a team is always, I think, the hardest part of growing a business. And when you start and your bootstrapped and you’re very conscious of your budget, you either hire someone young and unexperienced, who’s cheap, and train them. You hope they turn into, which a lot of times fails. And the other side is to hire someone that’s already been there, a professional, that’s done this for a big company. And we’ve tried that too. My experience with that is that industry pros are used to having a lot bigger ecosystem around them, better support. They want to be able to offload their tasks to people underneath them, which there isn’t when you’re just getting started. So we went that route too and tried hiring these pros, and they didn’t really work out either. They were overly expensive and the results weren’t quite there because they didn’t have the support that they were used to, I believe.

ROY:

We figured out we have to be somewhere in the middle. Someone that has some talent, that has proved themselves in some capacity, but maybe they need a little training or something. So that’s where we are today, is trying to hire people that are really excellent in their work and fit well with our culture. Maybe they’re not industry vets that have been doing it for 15 years, but they’re also not complete rookies that we need to train. And that has been a good strategy for us going back to the distribution channels.

ROY:

Starting online only is a really great way to go. You can iterate very quickly. So if you need to make a label change, if you want to change pricing, if you want to change the formula, you can do so pretty quickly. Whereas once you start getting into retail outlets, everything gets harder. It’s very hard to change the formula, the label and the packaging on a batch-by-batch basis. So we started online only, and then we noticed a lot of healthcare practitioners were reaching out to us because we had these innovative brain formulas that they wanted in their practice, where their customers, their clients, were asking for our stuff. So then once we got into maybe 100 healthcare practitioners, which were pretty easy to manage… These were professional doctors who would order a case at a time, or whatever. Pretty easy to manage that.

ALISON:

So doctors were prescribing your supplements?

ROY:

These are more naturopaths, chiropractors-

ALISON:

Okay.

ROY:

… that sort of thing. So not really prescribing, but recommending them to their clients. A lot of those naturopathic type doctors stock a lot of supplements. Getting into that atmosphere, I think was validating for us. “Wow. We could be sold in a physical setting and we’re being recommended by these professionals.” So then I started looking at retail and I said, “Why not?” I think Ben was very against it. He’s like, “You’re crazy.” But I said, “I know we can do it. I know we can get our products into some retail outlets.” It was eyeopening, really, that the retail world is completely different than online. It’s a very slow sales cycle. Most retailers only review a certain category one time per year. So you only have this one month window to submit your products. And if they say, “No,” you basically have to wait another year.

ROY:

It took longer than I thought, really, I think to succeed in retail. Start with the smaller independent stores, the smaller chains, they’re easier to work with, and get your sales velocity up. Do everything you can to support that store, give them great deals, train them excessively, make sure all the staff have tried your product. And once you create velocity in the smaller stores, then you can take that sales story to a larger chain and be like, “Look, I know you know we’re just a startup, but we’re in these 10 stores in California. We’re selling a case a week.” And that will get their attention. So always build off smaller, smaller chunks rather than trying to go straight to a large distributor or a huge retail chain. It definitely helps to have a sales story behind you.

ROY:

And that could be an online sales story. You can say you have these very loyal customers, your reorder rate is super high, we have this tribe of people who, if we say we’re available at their local store, they’re going to go buy it. That, I think, is how to win in retail. But you just have to understand that the sales cycle is super slow. It’s not going to just happen immediately where you launch a product and all of a sudden you’re going to be able to get to a thousand stores.

ALISON:

You spoke about training. So I know you went on circuits to your different retailers to train the staff. Could you see a direct impact in sales because of that?

ROY:

Yes. Totally.

ALISON:

Wow.

ROY:

Very, very important in retail is to get the actual store staff on your side, the staff that are standing in the supplement aisle. When a customer comes in, just your average Joe is going to go to that store staff who is generally uneducated. They didn’t go to med school. They’re a store clerk, and these people are smart and they’ve been working that industry for a while. But a general consumer is going to go to that store staff and say, “What do you have for mood?”, or “What do you have for stress?”, or “I’m trying to focus better. What do you have?” And if you’re not the first or second brand they recommend, they’re not going to try you. And, as a young brand, you don’t have the brand recognition either. You don’t have money for nationwide ads and things like that.

ROY:

So, for a young brand, I think training is the most important thing to get sell through in a store. So we are super generous with staff samples. Anytime we launch in a new store, we’re sending copious amounts of samples for the staff to try for themselves. And then what we do now is, now that we have pretty substantial distribution, every quarter or so, we’ll pick a month and every single order that we send to a store, we’ll include samples with a little note, “Here, try this. Let us know what you think?” The store staff are getting free stuff. They try your product, and if your product works, they’re going to recommend it.

ROY:

So our sales in retail started pretty slow, and I made that my main focus. In big brands, they call it the national educator, is someone that flies around and trains all the staff. It’s a lot of work. I would fly somewhere new in the country and visit 10 or 20 stores. Literally, just walk into the store and ask the staff, “Hey, do you have 10 minutes? I’m the founder of this company and I’d love to tell you about it.” Try to get their email, too, to follow up with them and, “Hey, did you try the products? What do you think? Let me send you some more samples.”

ROY:

The more established retailers, it’s very easy to do a phone training or webinar where they can get maybe five, 10, 20 of their staff together and make a little training event. Maybe you buy them lunch, say, “Hey, let’s do this webinar, and I want to teach you guys about the products.” And then give them some free samples. But super, super important, I think, for a young brand to really win in education. It’s very hard to do, but it definitely pays off in the longterm.

ALISON:

I love that. It’s easily forgotten that the staff is your muse on the ground, so I really like that.

ROY:

Online, it’s very easy to educate. You have your whole website, you have blog posts, you have podcasts, you can show videos, you can have as much text as you want describing the product and how it works and how they’re going to feel if they take it. But on a retail setting, you have two seconds of someone scanning that shelf. So besides your packaging, that’s really all the education that you have. So you really have to get the store staff on your side to be able to do that education for you.

ALISON:

I mean really, all of that, I’ve always felt that online versus retail, retail is just the old school. It’s all old school tactics. And what you were just saying, that just sounds like old school sales tactics, take people to lunch, let those things still work. Very cool. So I’m going to try to wrap this up. I would love to hear about what you’re most excited for, for the future for Natural Stacks.

ROY:

Well, our mission is to build a billion better brains. For me, it’s just really rewarding to get feedback from people that we have improved their mental health and their mental performance. I’m excited to just own the brain niche and be the brain brand. I think we have a ways to go. We’re starting to get there. I just want to help more people and help people become better versions of themselves. And that’s super rewarding for me and our entire team. I think that’s the ultimate goal, is if you can create something and put it into this world and you’re helping people, it’s awesome.

ALISON:

So is that something you’re measuring, one billion? How close are you?

ROY:

It’s hard to measure. We did measure, I think, bottles sold. I forget what count we’re at. It’s a pretty lofty goal, but why have a goal that’s not lofty?

ALISON:

You’re just going to have to keep doubling, two billion better brains, three billion, as you go on. So, thank you so much, Roy. If you want, you can leave one piece of advice for a CPG, small business owner, or someone who’s just getting started. I think they would love to hear from you.

ROY:

You have to create an amazing product, got to have a product that is differentiated and unique and special. I see brands that are successful having copycat products, but I think they fizzle out pretty quickly. So to create a long lasting brand, you’ve got to have something special and you have to know how to target your consumer. And I think a big advantage that startups have is the ability to move fast. Big CPG companies are super slow. They are looking to what the small companies are doing in terms of what they’re going to try to create or innovate. So your advantage is to create something unique. Maybe it’s not a Campbell’s soup that everyone’s going to buy, but you have the ability to really own a niche and you can find your target customer. And then just move fast because you can be faster than the big guys, and that’s a huge advantage.

ALISON:

Very cool. Well, thank you so much, Roy. If people are interested in Natural Stacks, where can they go to learn more?

ROY:

naturalstacks.com. And they can reach out to me directly. I like helping entrepreneurs, so roy@naturalstacks.com.

ALISON:

All right. And we’ll include those in the notes as well. Well, thank you again, Roy. This was super insightful. I actually have a full page of notes just from everything you’ve said,-

ROY:

Sweet. Awesome.

ALISON:

… so really appreciate that.

ROY:

Thank you.

ALISON:

Thank you. That was really fun. I liked that. That was cool.

ROY:

Easy. Any time.

ALISON:

Umai social circle is a CPG agency-driven podcast based out of Austin, Texas. We’re excited to share more behind-the-scenes insights, chats with industry leaders and whatever else we learn along the way. Follow us on Instagram, @umaimarketing, or check out our website, umaimarketing.com. Catch you back here soon.