WEBVTT - Real Cookies Founders on Health Snacking

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<v Speaker 1>This is Bloomberg Business Week with Carol Messer and Tim

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<v Speaker 1>Stenebek on Bloomberg Radio.

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<v Speaker 2>I love talking with those who have founded a small business.

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<v Speaker 2>It really is the backbone of our US economy. So

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<v Speaker 2>with us, let's get right to it. Is Lauren Berger

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<v Speaker 2>and Marla Felton. They have created their own business. They

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<v Speaker 2>are the co founders of Real Cookies, founded in twenty

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<v Speaker 2>twenty one, and they join us in studio.

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<v Speaker 3>And you founded in twenty twenty one.

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<v Speaker 1>Yes, yes, wow, So it's young. It's very young.

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<v Speaker 3>And that's like smack dad in the middle of a

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<v Speaker 3>year when you weren't allowed to be hanging out.

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<v Speaker 1>How did you or is that why you did it?

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<v Speaker 2>Tom?

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<v Speaker 1>Did it quarantine together? Yeah?

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<v Speaker 3>Ah, that makes perfect sense. Now, quarantine together.

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<v Speaker 1>A lot of people did it. So take us back,

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<v Speaker 1>either of you kick off.

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<v Speaker 4>It till We've been friends for over twenty years, and

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<v Speaker 4>we met when our daughters were sixteen months old. They're

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<v Speaker 4>now about twenty three, and over this time, we've had

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<v Speaker 4>so many people in our family and so many friends

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<v Speaker 4>that developed different dietary restrictions, and they weren't the same

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<v Speaker 4>dietary restriction. They were all different. So we would get

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<v Speaker 4>together all the time developing all these different desserts, and

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<v Speaker 4>we love feeding our family and celebrating and getting together,

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<v Speaker 4>but we couldn't find a dessert that tasted good, that

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<v Speaker 4>met the needs of everyone in our family. And so

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<v Speaker 4>that's really how we started Real Cookies, and we started

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<v Speaker 4>during the pandemic. I at the time had a yoga

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<v Speaker 4>studio and we closed during COVID and Marlon and I

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<v Speaker 4>had been wanting to start this business for a long time,

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<v Speaker 4>but we didn't really have the time and this was

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<v Speaker 4>the perfect opportunity for us to perfect our recipes.

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<v Speaker 3>So wait, some people, I guess were gluten what do

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<v Speaker 3>you call it, celiac? Some people were lactose.

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<v Speaker 1>Intolerant, dairy free.

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<v Speaker 3>Okay, and love sugar exactly. I'm trying to cut out

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<v Speaker 3>sugar right now.

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<v Speaker 1>You were like when they walked in, You're like, well,

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<v Speaker 1>wait a minute, Wait a minute.

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<v Speaker 3>Yeah, I said, I eat things with added sugar, and

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<v Speaker 3>these have I guessed maple syrup as a as a

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<v Speaker 3>sweetener in them. So how did you, how did Marla?

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<v Speaker 3>How did you guys come to this idea? Because I'm

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<v Speaker 3>assuming neither one of you is like a master chef, right, well.

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<v Speaker 5>We've always cooked for our families and we both love

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<v Speaker 5>to entertain, and we both really love cookies and desserts,

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<v Speaker 5>and honestly, when we'd go to the shopping to the markets,

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<v Speaker 5>we'd go down the aisles, we'd bring in the healthy

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<v Speaker 5>cookies for our families and for us, and there was

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<v Speaker 5>nothing that was worth eating. And we said, there's got

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<v Speaker 5>to be away. We've got to create a cookie that's

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<v Speaker 5>healthy and tastes delicious and is real because a lot

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<v Speaker 5>of the gluten free cookies, if you look at what's

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<v Speaker 5>in them, they're filled with junk. They actually have a

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<v Speaker 5>lot of sugar, they have soy, they have corn, they

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<v Speaker 5>have a lot of sneaky substitutes. So we were determined,

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<v Speaker 5>and we had the time during the pandemic to come

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<v Speaker 5>up with these restles.

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<v Speaker 2>Can I just tell you I do this all the time.

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<v Speaker 2>My daughter who's twenty, she does the same thing. We

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<v Speaker 2>turn around, we look at ingredients and we're always like,

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<v Speaker 2>I have no idea what this stuff.

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<v Speaker 1>This stuff is.

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<v Speaker 2>Your ingredients makes sense to talk to us a little bit,

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<v Speaker 2>learn about what's in there.

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<v Speaker 4>We have a very very short ingredradient list and our

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<v Speaker 4>bases almond flour, and coconut flour. We use real vanilla

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<v Speaker 4>maple syrup which has a lower glycemic index than sugar,

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<v Speaker 4>and just very very simple ingredients. We have no gluten,

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<v Speaker 4>no grain, no soy, no corn, but most importantly, we

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<v Speaker 4>wanted it to taste good.

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<v Speaker 1>Well, I'm gonna say I've sampled Matt can't talk right now.

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<v Speaker 3>Because they're very good chocolate chip minis, and they're delicious.

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<v Speaker 2>But a small business, it's a crowded marketplace, so tell

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<v Speaker 2>us about building this business.

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<v Speaker 1>You bootstrapped it yourself.

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<v Speaker 5>We did, yes, and we run a very lean machine.

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<v Speaker 5>We're very frugal. We both really put our hearts and

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<v Speaker 5>souls and uh everything into it.

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<v Speaker 1>And we what's the growth like, talk to us a

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<v Speaker 1>little bit about that. Well, we've grown and we've.

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<v Speaker 3>Started only I'm going to go a lemon blueberry minis

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<v Speaker 3>are so good you have to but I'm going.

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<v Speaker 2>To go a Shark Tank on you because I'm obsessed

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<v Speaker 2>with that show. I love small businesses. But tell us

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<v Speaker 2>about you know, costs, money, supply chains like this is

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<v Speaker 2>all real.

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<v Speaker 4>Yeah, Well, we've grown significantly just in our second year,

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<v Speaker 4>over seventy five percent, but it is very new.

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<v Speaker 1>The level blueberry minis are really good in terms of costs.

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<v Speaker 4>We wanted to make sure that we started with a

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<v Speaker 4>gross margin of fifty percent, and we know that there

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<v Speaker 4>were a lot of costs that we couldn't even think

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<v Speaker 4>about at the time that we were developing the product, right,

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<v Speaker 4>and we really just went out and started selling. And

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<v Speaker 4>we started with a single serve two pack because we

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<v Speaker 4>had yes, yes, because we wanted to encourage trial, and

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<v Speaker 4>so we did. Originally we went to ski resorts, to hotels,

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<v Speaker 4>they're in hotel mini bars, they're in about forty airports.

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<v Speaker 1>And we just started selling.

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<v Speaker 4>And when we started to get some validation, we thought

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<v Speaker 4>we would make a product that was appropriate for the

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<v Speaker 4>grocery shelves, which is when we came out with our

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<v Speaker 4>pouch of mini cookies.

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<v Speaker 1>We call them poppers.

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<v Speaker 4>Yeah. And one of the big breaks for us actually

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<v Speaker 4>was CBS took the product into two hundred and seventy

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<v Speaker 4>five stores and they did at tech and they liked

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<v Speaker 4>what they saw, so they just expanded to fifteen hundred store.

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<v Speaker 1>That's a big deal, a very big deal. Are you

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<v Speaker 1>just profitable?

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<v Speaker 4>Are we profitable? We are have a very good gross margin.

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<v Speaker 2>Okay, oh yeah, cost especially in today when with supply

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<v Speaker 2>chains are still.

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<v Speaker 1>A little tricky.

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<v Speaker 3>Where do you make them? By the way, you guys

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<v Speaker 3>are out of grantitche right, yes, yes, So where do

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<v Speaker 3>you make the cookies pure? You don't make them in

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<v Speaker 3>your yoga studio.

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<v Speaker 5>Right, So we produce both in New Jersey and in Michigan.

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<v Speaker 1>We have too.

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<v Speaker 3>So one of our producers was looking at the ingredients

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<v Speaker 3>and was like, these ingredients look great, but difficult supply chain,

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<v Speaker 3>Like for example, almonds, Uh, the price of that must

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<v Speaker 3>go up substantially.

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<v Speaker 4>You know, the prices have changed significantly in the wrong ingredients.

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<v Speaker 4>And so one of the parts of our mission was

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<v Speaker 4>to try and find more than one supplier for each

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<v Speaker 4>of our ingredients. And we also knew during COVID that

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<v Speaker 4>we needed to plan for supply chain issues, which we

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<v Speaker 4>have had many, especially with cartons and almonds and chips.

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<v Speaker 4>But we did try and plan ahead, and we're not

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<v Speaker 4>buying huge volumes yet, so it was a little bit

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<v Speaker 4>easier for us.

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<v Speaker 3>Did you have any advisors, Like, what did you guys

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<v Speaker 3>do before before?

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<v Speaker 5>He was a lawyer, right, so I've been one or less.

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<v Speaker 5>I was a y I was a lawyer, and I

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<v Speaker 5>also run a nonprofit.

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<v Speaker 1>So I mean these guys and you were in the

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<v Speaker 1>consumer food.

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<v Speaker 4>I do marketing for a Dive of Chocolate, and so

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<v Speaker 4>we had a little bit of experience. But we've worked

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<v Speaker 4>so well together that we just love brainstorming and building

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<v Speaker 4>upon ideas.

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<v Speaker 1>I mean, we know this is what you have a

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<v Speaker 1>little one, you know, young daughter.

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<v Speaker 3>Two and a half year old daughter Edna, and she's

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<v Speaker 3>going to have some of these cookies tonight, she is.

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<v Speaker 2>And I think about We certainly thought about it, raising

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<v Speaker 2>our daughter a lot of organic and very careful.

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<v Speaker 1>So you're in the right space.

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<v Speaker 2>What do you think about when it comes to the

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<v Speaker 2>next six to twelve months, like what's on your radar

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<v Speaker 2>in terms of growth or.

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<v Speaker 4>Yeah, well you had mentioned investment and getting on the

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<v Speaker 4>grocery shelves is a huge investment and that is where

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<v Speaker 4>a majority of our budget is going now. So we

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<v Speaker 4>are getting approved for supermarket chains. We just got into

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<v Speaker 4>Albertson's in the South. It's a big deal, a very

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<v Speaker 4>big deal, and so we are making those investments. We're

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<v Speaker 4>talking to Whole Foods and Sprouts and the large national

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<v Speaker 4>natural chains.

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<v Speaker 3>So you don't have to do a fundraising round or.

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<v Speaker 1>Would you like to We would like to, We would

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<v Speaker 1>like to.

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<v Speaker 5>We would also like partners you know that have synergy

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<v Speaker 5>with us always let's see investment space.

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<v Speaker 2>Like now, we just got about twenty five seconds. I mean,

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<v Speaker 2>are you reaching out and are people receptive?

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<v Speaker 5>Like we haven't really reached out so much. We are

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<v Speaker 5>building relationships with other we're just.

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<v Speaker 1>Putting a deck together now.

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<v Speaker 4>But we did also just do some recipe development with

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<v Speaker 4>Upfield and we're working with them. They have a lot

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<v Speaker 4>of great plant based products and so we just developed

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<v Speaker 4>a tremendous amount of learning working with them.

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<v Speaker 2>Well, it's a space we talk a lot about the

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<v Speaker 2>healthier food space. It's definitely a trend that just keeps

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<v Speaker 2>on growing. So we'd love to have you guys come

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<v Speaker 2>back and let us.

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<v Speaker 1>We would love to thank you so much and thanks

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<v Speaker 1>for the cookies, Matt, You've made that very happy. We

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<v Speaker 1>probably finish this on the way.

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<v Speaker 2>Lauren Berger and Marla Felton, co founders, are real cookies

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<v Speaker 2>here on Bloomberg BusinessWeek