How I'm Launching A Food Startup Selling Protein Water In A Can

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Mindful Proteins
from Portland
started June 2018
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revenue/mo
2
Founders
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Employees

Hello! Who are you and what business did you start?

I am Sean Penrith, the CEO and co-founder of Mindful Proteins. I was born in Zimbabwe, raised in South Africa, and have had the pleasure of being schooled as an entrepreneur internationally. I doubled Cape Horn on a 42’ ketch, ran a business in Buenos Aires before beginning new ventures in Johannesburg, Wisconsin, and Portland.

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Mindful Proteins is the seventh business venture that I have been involved in as a founder, partner, or chief executive. I have been heavily immersed in the world of sustainability, carbon markets, conservation finance, and climate risk for more than two decades. It seemed natural to me to create a company that solidly aligns with my belief in being a responsible denizen of the world.

Jacoba, my co-founder, and I have set out to build the best functional food and beverage company in the country. All our products use what we term clean label; they avoid the use of artificial ingredients, flavors, and sweeteners to deliver high levels of protein. Our vision is to build Mindful Proteins on solid principles of sustainability and product stewardship that aligns with the UN Sustainable Development Goals.

Our inaugural product is TATU Protein Water named after my mom, Tatu (tāh-too), who was an acclaimed South African artist. She set me on my path to wellness and is the inspiration for our mission to use simple, safe, and healthy ingredients to offer convenient hydration and muscle recovery post-workout.

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TATU is available initially in two flavors – Orange & Mango and Lemon & Ginger. Each 12 FL Oz can of TATU is loaded with 15g of whey protein isolate, contains 0g of total sugars and 1g carbohydrates, and just 60 calories. We source our whey from the pristine pastures of New Zealand and produce TATU right here in Oregon. Our delicious and naturally flavored clear water provides one-third of your recommended daily dose of protein.

Our consumer tribe is made of those who pursue a life of wellness. The people that love our protein water practice yoga, run, climb, and cycle. They are conscientious in aligning their values with their consumption. Clean and healthy ingredient labels, responsible sourcing and production, low environmental footprint, and brand authenticity are attributes that are guiding our company.

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Almost 2/3 of Americans are seeking additional levels of protein in their diet, but the current market offers very few clean labels and healthy sources of protein. Of the nine major competitive protein waters in the market, all of them contain artificial sweeteners, flavorings, or ingredients. There is no protein product that is dedicated to serving the wellness community.

We are preparing our first commercial production run in our final can design to introduce TATU is a leading natural grocery chain here in our state in early 2020. We are tremendously excited to bring our clean label functional water to you.

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What's your backstory and how did you come up with the idea?

It sounds a little dramatic, but yoga saved my life. It set in motion a series of life-altering shifts that had me brutally examine what I ate, what I thought, and how I moved. Considering my demeanor 10 years ago, it is a miracle my wife remained married to me.

Soon after I sold my business, moved to Portland and met my wife, I tore both meniscuses in my knees, preventing me from walking up stairs without searing pain. Before my mother passed, she convinced me to avoid any medical procedures and instead try yoga. Without much conviction, I followed her advice, purchasing a beginners’ disc by Rodney Yee. Within three months of daily practice, I could run for the train!

We have been bootstrapping the business since filing the company papers in June of 2018. I run a climate finance consulting company and we divert as much revenue as we can towards investing in this business.

I then discovered the 108 Days Ultimate Yogi program by Travis Eliot. I loved it! I completed several rounds and felt the fittest I had been competing in endurance mountain biking. I felt compelled to add a healthy diet to my physical regimen. I tried the Whole30 program (30 days without processed foods, sugars, and other irritants) and it became a way of life for me. I was challenged to find protein-rich foods without additives for my family, including my youngest boys. As I researched protein options I was struck by how much many of the available products were geared largely for “muscle heads,” how medicinal they all appeared, and the degree of elevated sugar levels and other gunk they contained. To top it off, despite the gallant effort they all tasted awful!

Feeling good about my progress on the physical and dietary front, I then turned to meditation. While I credit my wife for much of the positive changes I have experienced, I know that the combination of yoga, meditation, and diet was the secret cocktail for my enhanced sense of well-being. After an intensive yoga practice, I like to hydrate and consume protein that helps with muscle tone and recovery. During a discussion with Travis and Lauren Eckstrom—the best yoga instructors in the world--the realization dawned on me that drinking protein water post-workout would tick all the boxes! One problem. There was no clean-label protein water on the market.

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After several months of market research, I decided to develop one and bring it to my wellness tribe.

Serendipity has offered me the opportunity to co-found Mindful Proteins with Jacoba Gundle who I’ve worked with over the past few years, and who shares my passion for sustainable living and a healthy and active lifestyle. We are well-timed I believe, launching on the wave of the global Health and Wellness market that reached $4.2 trillion in 2017! The sector is projected to grow at 17% over the next five years. This megatrend is propelling two of the fastest-growing beverage categories; functional beverages and hydration with a combined value of $106 billion.

Over the summer of 2019, we sampled our TATU protein water with over 2,000 yoga practitioners, climbers, runners, and cyclists. We received resounding feedback in terms of flavor, aroma, protein loading, and product messaging. We decided to make it a little more official. We recently went head to head with three of the leading protein water brands in a sensory test to determine consumer liking and purchase intent. The takeaway from the comprehensive testing was very favorable for us. TATU had a significantly higher purchase intent based on taste alone, based on the ingredient statement, and the nutrition panel than the other brands. This was a significant milestone for us to achieve!

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We have been blessed with an amazingly engaged group of advisors that have helped us navigate our route thus far. They include Morgan Rider (Oliver Russell Branding), Melanie Haliburton (Yogi Tea), David Hicks (Food and Beverage Consultant), Guru Hari Khalsa (Co-Founder of the Moon & Lotus Center for Movement and Healing), Anton Kimball (Kimball Design), Emily Light (Emily Light Yoga), and Leona West Fox (Certified Nutritionist & Certified Herbalist).

Take us through the process of designing, prototyping, and manufacturing your first product.

If you have ever had a beverage that contains whey protein you will know that they tend to be milk-based shakes and have a load of added sugar. Whey is very astringent and typically leaves that chalky feel on the roof of your mouth; hence the use of gobs of sugar to mask that effect. Whey also likes to settle out of the solution. So, making clear whey protein water that had no sedimentation and no added artificial sugars was quite the challenge in our formulation of TATU.

We worked with Sarah Masoni and her team at the Food Innovation Center (FIC) right here in Portland to develop the formulation for our protein water. Sarah had Mike Adams work closely with us. We must have driven him crazy in our quest to develop delicious and clear water loaded with at least 15g of whey protein using only clean ingredients. One hundred and ten formulations later, we sipped our winners! FIC had crafted our first two flavors--Orange & Mango and Lemon & Ginger--made from water, whey protein isolate, salt, natural flavors, and organic sweeteners (Stevia Leaf Extract and Monk Fruit). Our delicious water is free of any sedimentation at all!

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Next up was to test the formulation in a production setting. Jacoba worked the telephones trying to find a co-packing company that was open to running a small batch of our water. We were quite stunned at how few options there are for start-up companies such as ours.

Jake Porter of Columbia Distributing, one of Jacoba’s good friends referred us to Mike Radtke of Gilgamesh Brewing in Salem. We met with Mike and Jacob Foose at Gilgamesh. They were enthused to co-pack our water. We had a co-packer!

At the end of a long day at Gilgamesh on June 27th, 2019 we had over 2,000 cans of Orange & Mango. The formulation successfully translated from the lab bench to the production floor. Jacoba and I drove back to Portland that evening beaming all the way home.

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Since we are aligned with the Sustainable Development Goals, all the services and products we use are carefully considered. We opted for a can instead of plastic for packaging due to the higher recovery and recycling rates. Our carton manufacture was vetted for their alignment on environmental stewardship and certification under SFI or FSC. We are born in Oregon and want to source from Oregon to keep our carbon footprint low as far as possible.

We are a certified Benefit Corporate for Good and have joined 2,000 other businesses to support 1% for the Planet. Mindful Proteins became a Benefit Company through the State of Oregon in 2019, which means we consider our impact on society and the environment as part of all our business decisions. To become a Benefit Corporation, Mindful Proteins will have to adopt a third-party standard to ensure we are creating a positive impact. We chose to become a certified Benefit Corporation for Good, the only Oregon-based third party standard. As part of our commitment, we will post an annual report to our website detailing our activities for the past year that positively impacted the triple bottom line.

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Describe the process of launching the business.

We have been bootstrapping Mindful Proteins since filing the company papers in June of 2018. I run a climate finance consulting company that Jacoba is part of too. We divert as much revenue as we can towards investing in Mindful Proteins.

We have been amazed at how helpful people are in the food start-up space. People have graciously given us their time and advice and it has been such a help to us as we figure out the CPG space. We hope to be able to give back in a similar manner as we take our company on its journey.

We are planning our first commercial run of 12,100 cans of TATU with our Salem-based co-packer, Gilgamesh Brewing. Early 2020 will see the targeted introduction of TATU in select yoga studios, the retail sector, and online. I will then be actively recruiting seed capital investors to ramp production, drive market penetration, and product adoption. 2020 will be a huge year for us. Our five-year goal is to be a $100 million company with a family of functional food and beverages in the market.

We are being very deliberate about bringing TATU to market. Now that we have completed our customer discovery and customer validation phase of our customer development model we will embark on the customer creation phase. We will target the portion of the 18,000 yoga studios on the West Coast to carry the line and offer directly to consumer sales via fulfillment by Amazon and the e-commerce section of Mindful Proteins’ website. Yoga retreats and yoga festivals will also offer huge promotion opportunities to build the brand halo. This will build the tribe and the brand cachet for leverage when we broaden our market and introduce new product lines.

In parallel, we will build our retail footprint methodically and avoid the allure of scaling too fast. Once we solidly establish TATU in Oregon, we will move into Washington, and then California. Our next big leap will be to the East Coast before focusing on major metropolitan areas in the central parts of the country. Only once we have volume production well established, will we actively recruit distribution relationships with the headline national distribution companies with appropriate in-house channel management.

Since launch, what has worked to attract and retain customers?

A key takeaway from my past business endeavors is the crucial need to clearly understand who we are serving, why our solution is the best, and how best to reach them to scale market adoption. Creating a successful brand for TATU will depend on the effectiveness of connecting with our initial targeted consumer group—developing a tribe, as Seth Godin writes. Supporting why the product is beneficial to the target market followed by how TATU achieves this and finally what TATU is will be the powerful sequence used to communicate our message and build brand loyalty.

In one business that I co-founded, we operated on three continents with a team of 350 people producing 35 lines of products addressing three different channels. It was no wonder that I ran ragged for 14 years sleeping on planes between factory visits. After selling that business, I committed to truly understanding and employing a strategy that delivered a singular focus without trying to be all things to all people.

We have embraced the proven Lean Startup Customer Development Model that ensures burn rate is kept to a minimum, offers lower levels of risk, and stimulates rapid scaling. The Model involves customer discovery, customer validation with needed pivots depending on what is discovered, followed by large-scale customer creation and company building. Only once Mindful Proteins is assured that it has reached the appropriate stage to begin scaling will we recruit the personnel to handle sales, marketing, and business development. This team can then embark on customer and company building activities that drive home the purpose, position, and personality of TATU protein water and allow significant growth. We have just passed the discovery and validation of mile markers. We are now gearing up for the customer creation phase, which is super exciting.

Mindful Proteins has the opportunity to develop a brand personality around an archetype that deeply connects unconsciously with our target wellness-centered consumers. We are sure that successful implementation will drive brand loyalty, engagement, community development, and adoption. This approach will drive the meaningful delivery of our brand story and avoid the pedestrian content-driven method that fails miserably to engage consumers these days.

Choosing a brand archetype for TATU is helping our target consumer instinctively trust, identify, and willingly try the protein water. It is, of course, essential that the product and I and Jacoba authentically live up to the claims. We chose the brand archetype known as The Innocent since it best aligned with our target of the yoga community and mainstream wellness devotee to promote the TATU line. The Innocent typifies ideals of purity, optimism, and simplicity. The key is to appeal to the attributes of being authentic, trustworthy, and transparent.

The emotional message the TATU brand will deliver will be one that reinforces the journey our supporters are on to improve their bodies, their minds, and their souls; to be consummate human beings attuned to their wellbeing. In total transparency, we are currently pre-revenue and pre-launch, so check back in with us in 2020 and we will honestly share how well our thesis and approach performed.

How are you doing today and what does the future look like?

Jacoba and I are feeling pretty good about where we are right now. In March of this year, we had no formulation for the clean functional protein water that I had in my mind's eye. I knew that if we could develop it, it would be brilliant for hydration and muscle recovery post-workout. At the time, Jacoba and I were slaves to a consulting client that was demanding much of our time. Frankly, we had little idea on how to bring our vision to reality. Six months can have a dazzling impact on things.

We are very happy with the results of the formulation for our two inaugural flavors (Lemon & Ginger and Orange & Mango) for TATU. Using 99designs.com we enlisted help in developing brand options for TATU and had our tribe weigh in to narrow the choice to the final version. We had Food Safety Assessments complete our Process Authority Letter and Foodwit reviewed our label for FDA compliance. Just this week we sent the final label design off to our can manufacturer.

Jacoba is assembling all of the ingredients for our commercial production run with Gilgamesh Brewing before the end of the year. Our goal is to introduce TATU in a prominent natural grocery chain in Oregon and to a select number of wellness studios. We will also offer our products on our own eCommerce section of our site. This will offer us a tremendous about of learning to improve all aspects of our operation. Only once we feel we have validated market traction will we begin to expand retail and studio presence. We will introduce the product to Amazon too in the latter part of 2020.

Through starting the business, have you learned anything particularly helpful or advantageous?

Early on during the formation of Mindful Proteins, Inc. we were involved in discussions with a potential partner and founder. When it became clear they wanted to own the intellectual property relating to the formulation, I thanked them and said no. It was not easy. The good news is that they remain a strategic partner for us but the takeaways are that unless you own your ‘lock’ on the business opportunity you at playing with a handicap.

We learned the importance of conducting trademark searches before settling on a brand name. The same goes for using Foodwit for label review. This early feedback was crucial to helping us avoid bringing a product to market only to find that we had legal challenges.

We have been amazed at how helpful people are in the food start-up space. People have graciously given us their time and advice and it has been such a help to us as we figure out the CPG space. We hope to be able to give back in a similar manner as we take our company on its journey.

We do believe that we have launched Mindful Proteins at exactly the right time. Wellness has been dubbed, the “new black.” The expanding wellness trend is driven by the prioritization by consumers for having balanced mental and physical health, especially in the face of rising health costs. The realization that food can be used to manage health has boosted consumer interest in fresh, natural, organic, and better-for-you products. While these more mindful consumers are squarely centered on pursuing personal transformational experiences, they are, according to a Stella Rising 2017 wellness report, “still very acquisition-minded...but only if the products and services authentically align with their values—and therein lies the key to this consumer.” We are integrating the messaging solidly in our product offering.

What platform/tools do you use for your business?

We use a combination of a number of useful platforms at the moment. The most used ones include Mailchimp to send out our monthly newsletter,HubSpot for CRM, Wordpress to host our website, Trello for task management, Dropbox for an online file management, Facebook and Instagram for social media, Freshbooks for accounting, and will soon be activating WooCommerce for all of our ecommerce needs.

We are constantly looking for new systems that integrate with each other to streamline our operations. Launching a business has proven to be a great time for us to try new platforms and tools to see what works best for us. Luckily there is a large network of free resources for small businesses that have made our lives much easier. We will definitely switch to paid versions of our favorite systems when we become big enough to warrant the expense.

I have really seen the gains in using the CommitTo3 app. At the beginning of 2019, Jacoba and I mapped out our critical pathway to bring TATU to market. We began with a whiteboard to brainstorm the best path. We moved it to Trello for tracking and management. We then use the CommitTo3 app to plan the top three items that must be completed the following day. We set up the Mindful team on the app so that we can both see and track each other’s progress. An amazingly simple yet powerful accountability tool I would encourage you to check out.

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What have been the most influential books, podcasts, or other resources?

First out of the gate would be the fantastic book by Jim Collins called Good To Great: Why Some Companies Make The Leap and Others Don't. It helps every company create a guiding North compass to ensure that you avoid being dazzled by shiny distracting objects and build to your strengths.

The second would be Tribes: we need you to lead us by Seth Godin. I love this quote by Seth: “GOOD enough” stopped being good enough a long time ago. So why not be great?

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Favorite podcasts would include How I Built This by Guy Raz and Food Biz Whiz by Allie Ball. Guy’s guests inspire courage and persistence and Allie’s guests bring a host of tangible advice that one can execute right away.

Steve Blank of the Lean Startup offers incredible value to help in crafting the Customer Development model that we have adopted at Mindful Proteins. A tremendous business mapping tool is the Business Model Canvas that I have used for over a decade now. It is fabulous to use in a team retreat setting to really dial in your plans. I recommend the BMC and then follow that up with your hedgehog model using Jim Collin’s approach.

For financial model templates, I have found SCORE to be a fabulous resource! Earlier in 2019, I signed up for Dr. Ben Hardy’s AMP program. It is a global network of like-minded people with a high degree of accountability. I have definitely experienced gains from participating in his program (I am not affiliated in any way to his program).

Advice for other entrepreneurs who want to get started or are just starting out?

I reference these in the useful resources section, but they are worth detailing a little more. There are two principles I am an avid supporter of.

The first is the Lean Startup Customer Development Model. This has guided us through customer discovery, customer validation with needed pivots depending on what is discovered, followed by large-scale customer creation and company building. This approach will position any company to execute with the assurance that the brand can scale.

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Only once we are assured that it has reached the appropriate stage to begin scaling will we take on the additional overhead of personnel to handle sales, marketing, and business development. This team will then embark on customer and company building activities that drive home the purpose, position, and personality of TATU protein water and allow significant growth. This approach ensures that our burn rate is kept to a minimum, offers lower levels of risk, and stimulates rapid scaling when all signals are green.

The second is the hedgehog concept. There are many things a company could do and I attempt to paint that ultimate picture in our company vision statement. But after years of starting or turning around businesses, I have learned (often painfully) one simple but powerful lesson: Do one thing well. Become reputed for that one thing and earn healthy margins doing so while doing good.

For many, you will recognize that this is, in fact, the hedgehog approach that Jim Collins so eloquently shared in his epic book Good to Great. He is spot on! Once we have a viable beachhead product positioned and gaining traction, only then will we entertain the prospect of additional products, variations, and additional business elements.

“Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice, and discipline.” ― James C. Collins, Good to Great: Why Some Companies Make the Leap... and Others Don't

Are you looking to hire for certain positions right now?

We are planning on hiring a commission-based sales representative(s) to help with developing retail relationships with yoga/barre/pilates studios and securing natural grocery retail accounts in the Pacific Northwest.

With demonstrated initial retail traction, we will move quickly to hire a sales professional manager that is intimately familiar with the natural grocery sector followed by marketing, logistics, and finance. Our first ten hires will participate in our employee stock option plan.

While we cannot afford the salary overhead at this point in our growth trajectory, we would love to have people join the team if they can help us on our journey and are able to grow with us. We ask only three things of our future team members. Please bring integrity, fun, and results with you.

Where can we go to learn more?

If you have any questions or comments, drop a comment below!

-  
Sean Penrith,   Founder of Mindful Proteins

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