Chase Alderton: Welcome to Hit Subscribe a podcast by Recharge designed to educate, inspire, and connect the subscription commerce space. On today's episode, we're talking to Steven Gmelin, VP of digital sales and strategy at Aloha, creators of healthy plant-based foods, snacks, and meal replacements. We chat with Steve about why, after almost two decades, he moved from one of the biggest food and beverage companies in the world to work at Aloha. Steve also shares how the complete renovation of their D2C strategy resulted in triple digit growth and the steps they took to achieve that. Lastly, we chat about what's next for Aloha and the benefits and challenges of working with a smaller team. Let's get started.
Chase Alderton: Steven, thank you for joining us.
Steven Gmelin: Thanks, Chase. Glad to be here.
Chase Alderton: Gives us a little bit of info about yourself and about Aloha.
Steven Gmelin: Sure. I I'll start with Aloha. I left PepsiCo, after 19 years, in August of 2019. Left, basically a $65 billion CPG conglomerate to join a very tiny, almost startup. It's been an amazing journey. We've scaled our digital business significantly over that time period. And I've learned a lot. It's been a very rewarding experience. I started with PepsiCo when I was 18 years old. I was still an undergrad. I was started as an intern, went through a management development program, had a sales territory in DC, really worked my way through the sales development program at PepsiCo and had a lot of opportunity. Learned a ton. Had tremendous respect for the organization. But this opportunity came along to work for really small brand within the food and beverage space in the plant-based side, which I think we all know and recognize as the fastest growing segment and just seemed like an amazing opportunity and a lot of great people that I got to join in the journey. And we've been really on a great path since I started so.
Chase Alderton: Love it. Love to hear it. Rarely do we get a chance to talk with someone who's been on that side, where they have kind of this massive company giant experience. That's actually where I want to start before we even up into Aloha. You said you were there 19 years, give us a little bit of background. What's it like working for a giant conglomerate, like you said?
Steven Gmelin: Yeah. When you're with a large CPG, like PepsiCo, clearly have all the resources at your disposal. My career journey at PepsiCo, it took me kind of from the field into headquarters, where I took on more of a brand development commercialization role. Got to work on, some subscale brands the allied portfolio of PepsiCo. Those are kind of more of the forgotten brands, less of the priority brands. You have to be scrappy and really push an agenda to give them some air. I got kind of the itch to work on that brand development side of things, and I always look back at my career at PepsiCo as some of the fondest moments of the time I was there.
Steven Gmelin: And right before I started working on that brand development side, with some of these smaller brands, I had this opportunity to go out to Seattle and be a part of the very first PepsiCo team that went to meet with Amazon as a collective unit. I went out there and the whole purpose of the meeting was that Amazon was rumored and they had shared enough that we knew it was a legitimate opportunity that we needed to take seriously, that they were going to open this concept of Amazon Fresh online grocery stores and a couple of dozen markets over the next 18 months or so, they had told us. It took them like three years to get there. But I remember sitting in this amazing office conference room in this, almost college-like campus. People walking around with their dogs. And it was just a very different place, the energy and the excitement, you knew they were onto something special. And I just became hooked.
Steven Gmelin: I left that role a couple months later and I had this opportunity to lead these emerging brands and the concept of building brands in that digital space and that e-commerce space and looking at a digital first go to market, it never left me and for the three or four years or so, I was in that brand development role I stayed really close to the building of the e-commerce division of PepsiCo and the leadership team there. And in 2016, when they launched a global e-commerce team, I was asked to join it. I was one of the inaugural members and there was only a couple dozen of us.
Steven Gmelin: When I left the company back in August of 2019, it had been built over 300 people and it was some of the brightest and most talented people I'd ever worked with. People that had skillsets that were so different than anything that I had experienced earlier on in my career, as I was working through the field and account management and brand development. And I got to lead an online grocery business, working with lots of large national and regional grocers and saw how the retail landscape around us was changing significantly. Kind of the rise of omni-channel.
Steven Gmelin: And you had this kind of a dynamic where big retailers that were so well positioned in the brick and mortar side of their business they were almost creating these mirror organizations to support the building of an e-commerce or a digital sales channel. And we got to support those retailers and share best practices. And I'd like to think that PepsiCo and the team that I was on, we helped to really pave a path for some of those retailers, in terms of what they needed to do to win. It was just an incredible opportunity to work really on the forefront of retail. I moved on from that into leading the walmart.com and jet business. Did that for a couple years. When I left, I was leading the Walmart online grocery business, which was really starting to show you kind of the future.
Steven Gmelin: So many great experiences in those roles. And I just knew that I always wanted to stay on the digital and the e-commerce side of the business. And you could see where the shopper was going. It's been all about convenience and being where the shopper wants you to be in and positioning both from a retail and a brand standpoint, to be best positioned to meet the shopper in whichever channel or whichever manner in which they're looking to shop. And PepsiCo did an amazing job building out the team to support those things. Functional experts that just made it so that you couldn't not be successful. It's one of those things when you leave a big company, that's so resourced like that, and you go to a small company, you miss that, but it really forces you to learn and to stretch your capabilities and prove to yourself that you can make something of the situation
Chase Alderton: That's super cool. And for our audience, it's a lot of smaller D2C brands who are trying to grow and trying to get to that spot and PepsiCo's that, so I'm sure everyone's a little bit jealous hearing that you have as many resources as you need, and you can build up your teams and all that. That's actually where I want to go next is where's the kind of the balance of enjoying this large, built-out team, kind of thing, but then kind of shifting and moving to a smaller company, maybe not having as many resources, maybe not as well experienced, maybe not as many veterans. Why take the risk? Why go small? What is it about this kind of D2C movement that you see that, that made you want to jump ship?
Steven Gmelin: Yeah. And that's just it, I didn't want to jump ship. I had no desire of ever leaving PepsiCo. I thought I would be there my entire career. Again, I have the most respect for the organization, the leadership teams, the people I worked with. It was a family. It was really the hardest decision that I ever made in my life. I was so comfortable there. I think it's just one of those lessons in life, when you get too comfortable with something, you're not necessarily challenging yourself to be the best that you can be or living life to the fullest.
Steven Gmelin: I met the CEO of Aloha who had been in his role for 18 months or so. Really was rebuilding the company and spent a lot of time talking to him. Literally months. II tease him all the time, it was like a four month courtship. I developed this really good relationship with him and a great sense of trust and admiration. And I gave him a lot of feedback. You know the expression, tell me your baby's ugly. I told him, "You've got a lot of improvements that need to be made for you to have like a serious digital and e-commerce business." And he took it all in stride. Obviously, not the divulging confidentialities at the time, but just talking to them about, you know, kind of where I saw the opportunity. He kept saying like, "All right, what's it going to take for you to come work for me?" And with a startup your resource constrainted. So it's not like you can get an offer that just makes it like a no brainer. It's really, you have to have confidence in the people you're working with, the brand, the category and yourself.
Steven Gmelin: And I think that, that's the part that was the hardest for me, because you come from a place where you're just so comfortable and you just know you're on a great trajectory, career-wise. You're surrounded by great people. They have your back. They're looking out for you. There's opportunities galore. If you say you're not challenged enough, they'll gladly put more stuff on your plate, but I just wanted to prove to myself that I could take on a risk, because I'm fairly risk adverse when it comes to those types of decisions and prove to myself that I had enough to offer that I could help to scale a small brand into doing some big things. You look back every once in a while and you're like, "Was it the right decision?" I have no regrets. It's been so personally and professionally rewarding. I've learned so much, my family and my support network was there the entire way to make sure they knew that I couldn't fail. And the business performance has really been outstanding and I'm more confident, today, than I have been at any point in the journey over the last 20 months.
Chase Alderton: It's awesome to hear. It's great that everything worked out. It really is a great success story, because you come from this, this place that's comfortable and it works and everything's moving and you're leading this big team. It's one of my favorite quotes though, is, "Comfort is the enemy of progress." Whereas, you hit that point where you are very comfortable and you know what you're doing every single day walking into work. And all of a sudden you kind of click and think, "Maybe this is something I should push myself to do, and actually try to build this and go different directions." It's impressive to hear on that side.
Chase Alderton: But you mentioned that Aloha's kind of reinventing themselves. There's a lot to change. There was a lot to maneuver and a lot of things to update. Walk us through a couple of things that needed to happen, and a few of the changes that you saw happen and what that's like for a small brand.
Steven Gmelin: Yeah, absolutely. I got a little bit of a preview as I was getting to meet Brad Charron, our CEO, and we were talking about the business and the opportunities and kind of the history before I had started. I always like to say Aloha is like a startup, but it wasn't a startup. Because Aloha was founded in 2013 and kind of hit the scene hard and raised a lot of money, became a pretty decent sized organization. I think one thing that the initial team that got right was this vision of being a holistic health and wellness brand, plant-based and having something for everyone. The categories and subcategories that the brand played in were really wide, not very specific. There was a lot of opportunity from a portfolio management standpoint in getting the assortment, right. Really playing to your core competencies and not going so wide that you lose that relevancy with that target shopper.
Steven Gmelin: There was a ton of maybe missteps made on how the website was built and managed, and the role that the website took on. Aloha.com is just such a great piece of real estate that you really want to make sure that it has a purpose and that you're driving value to the brand through that website. That was something that wasn't happening. There wasn't a lot of attention being played to some of the larger e-commerce customers that, from my experience, in my prior roles, that I thought were just huge misses. There was a lot of reinvention there.
Steven Gmelin: And then didn't really learn this until later. But, you think of the brand as being kind of the glue that holds it all together. I thought there was more there than there really was at the time. That was something that also needed a lot of work. And frankly, it's still something that's being worked on. Not that work on a brand has ever completed, but there has to be a general purpose. And we lacked that for a while. That was another reason that it made sense for me to leave because it wasn't like you're leaving to go somewhere where things were all in order. Things we're not in disarray, by any means, but there were just so many opportunities. There seemed to be so much low-hanging fruit that I felt that I could come in and make an impact. And that part's been a lot of fun as well. Oe of the things that, as I mentioned, needed the most work was the website. We got started on that. And then rebuilding out that digital ecosystem from a customer standpoint really quickly.
Chase Alderton: I want to dig into that more, the brand and the domain, aloha.com. It's such a good piece of real estate like you said. How did that come about? I think you guys ended up buying it, right?
Steven Gmelin: Yeah. I mean, so obviously well before my time, but the company folklore, so to speak is, is that we had a very successful kind of entrepreneur that founded the company along with several Hawaiian investors. And they're very well connected and they were able to take advantage of an asset sale by the Hawaiian government. And that was kind of the prize. It's been a part of the company ever since the founding, but it's a valuable domain and we needed to put it to good use and make sure that it served the purpose and that paid homage to kind of the history and also to the vision of being accessible, health and wellness brand and really speaking to a company that's doing all the right things. We're a small company, we just hit 15 people and we've been on just an incredible path of trying to do better.
Steven Gmelin: And one of the things over the last few months that we accomplished those, we became a certified B Corp. We're an employee owned company. We all have a vested interest in making sure that we utilize the assets that we have and the resources we have to do good. We're incentivized. And we're building something that's, that's pretty special and we want to do it the right way. And we wanted a place where we could share that. We've done a ton of philanthropic good, through this pandemic. And we've done some great things from our portfolio renovation. We've always been USDA certified organic, and we added non GMO project certification and fair trade certifications for our drinks that we just relaunched. And we want a place to drive traffic that we could share our story and to share the work that we've done on our brand, on our products and really create a connection with shoppers. And we didn't have that with the original site.
Steven Gmelin: It was one of the things that was a really high priority coming in. I think one of the very first meetings I had with our CEO and our chief investor, we went out to lunch and we talked about what it would take to rebuild the website. The reality was like the website, as it was had won design awards, or at least had been nominated for several design awards, which is really cool, but the problem was we are a Shopify Plus customer, and there's so many benefits of being on that platform. We had this super customized theme that we couldn't really do much with. With a very small team of non coders, we weren't really seeing the opportunity or maximizing the potential of the platform. We got alignment. It's to rebuild the site and that was quite a journey in and of itself. Be happy to share more about that if you're interested. Sure. We
Chase Alderton: I'm sure. We hear stories all the time about these hyper customized themes and how they work really well, but all of a sudden, anytime you make a change, it's a huge effort, huge lift just to get something moved or something changed, or pieces of texts or things like that. Its really common, see that quite frequent.
Steven Gmelin: Yeah. Our situation was quite a functional, commercial site. You could go there and you could buy things. Generally, they get shipped to your house when you expected them. That was kind of the extent of it. What we wanted to do is build something that was engaging, that would drive loyalty, that we could then build on. Obviously with a commercial site like that, you're looking to have your investment drive, good customer lifetime value. And eventually when you do it all right, that loyalty should reward you in monthly recurring revenue. Those were not things that we were seeing at the time. We worked with a Shopify plus agency, great organization, Chelsea and Rachel co, and they helped us down this path.
Steven Gmelin: And we told them we were super motivated to get this project done. It was late October. We wanted to relaunch by Thanksgiving. We worked really fast. We came up with an idea. We built out some wire frames, took them through the team, team loved them. Brad said to me, "You really should take these wire frames to the board and share at least with a couple of the board members," specifically Johnny Bauer, who at the time was the chief global creative officer at Droga5. Like, "He's going to have some perspective. He's going to give you some feedback. You'll probably value it. You can take it or leave it."
Steven Gmelin: I remember sitting in Johnny's office taking him through it. He's like, "Dude, this is a beautiful house. It makes perfect sense." It's not like, you know, kitchen, bathroom, dining room. It's like, well-organized. He's like, "I think, I think you're onto something here." He said like, "So what's the creative brief that you gave this agency?" And I'm a sales guy. And I looked at him and I was like, "Creative brief... what do you mean?" He's like, "Well, this is your house. How are they going to paint the walls and rearrange the furniture and such?" I was like, "I don't know. I guess they'd take what we've done in the past and just make it better." He's like, "Dude, that's not going to deliver a good result."
Steven Gmelin: It was this eyeopening experience where you're like, "All right, we have the right vision, but we don't have the brand piece to give them." And we decided to go back to the drawing board and work on our brand and it put our web redesign project kind of on this hiatus while the brand work was being done. And that just took a very long time. We finally got to a place where it was good enough, call it February of last year, which enabled us to move forward with ... I love the quote you used before, Chase, "Don't let good enough get in the way of perfection," or whatever it is. We had something that was workable and we decided to launch it. And the timing couldn't have been better because late February, all of a sudden you started having some rumblings of pandemic and shutdowns.
Steven Gmelin: What we saw over the coming months enabled us to run really fast. Whereas, if we hadn't redesigned our site, we wouldn't have been able to capitalize on the opportunity, frankly, that was presented to us by this very rapid shift to direct to consumer. We were well positioned there and we've made a lot of changes since then. We upgraded a lot of the platforms that we run on our website. We moved on to the Recharge platform because we do aspire to have a product that's worthy of shoppers subscribing to, and we know we've a long way to go there, but it's a work in progress. As with everything on our, in our digital ecosystem, making a lot of strides.
Chase Alderton: I was actually going to ask you why things like vision and mission are so important in a brand concept. And it's awesome to hear you say that you're a sales guy, you didn't quite understand the brand thing. I had a very similar experience at Recharge. Brand designers and they're pitching you why colors matter and why phrasing matters in why organization matters. And your first thought is like, "This doesn't make any sense. This stuff doesn't matter. You move them down the line and they buy stuff," but it really does make a difference. What's maybe one big piece of the process that you've learned going through this design process and learning your vision and your mission and how that kind of translates to the whole customer experience.
Steven Gmelin: Yeah. I think it's being purposeful with it and not rushing just to get something out the door. We certainly took our time. But we didn't really have the right vision at first in terms of how to bring it all together. And just to start painting the rooms of this house that we were building arbitrarily, just so there was paint on the walls, wasn't really going to get us very far. We got to a point where it was good enough and we moved and it was a good decision. You don't have to wait for it till it's perfect.
Steven Gmelin: And then what I've really learned over the course of the last six months is that once you have something that's workable, it's just an iterative process. You just continue to improve upon it. We hired a head of brand and creative that started in January. Guy's brilliant. One of the best creative talents that I've ever seen or worked with. And he spent the last three months, like building out our brand ID and our visual identity and tone of voice and all the things that, when you put them together, will get us to where we want to be. That destination. Not that that destination is a final destination, but it's a place which brings everything together as cohesive and coherent. But it's good that we didn't wait because we would have missed a tremendous opportunity over the last 12 months that, I think at least has a good, a good amount to do with the fact that our D2C business is up 350, 400% in the last year and scaling rapidly.
Chase Alderton: [inaudible 00:22:24]website now has turned into a significant acquisition channel at this point. Now that everything is again, not to use the word done, but now that everything is moving and there's an end goal in mind, you kind of see that in the process is working.
Steven Gmelin: Yeah. Yeah. It's been, it's been a pretty strong conversion tool for us. For not just sales, but just converting people into our ecosystem and growing our email list and our ... We launched SMS a month or two ago, and really starting to build that up and starting to create different types of conversations with our shoppers. Conversations that are not so much only focused on the latest promotion or deal that we're running. But how to incorporate plant-based diet foods into your diet and the benefits, and the great things that we've done within the world.frankly in March, which was B-Corp awareness month, we decided to use that opportunity to share that we are now a B Corp and we used our social media channels and our website to recruit and share good work that we did.
Steven Gmelin: Working with an organization called Conscious Alliance that has a mission to ensure that no child goes to bed hungry. We used our website to like-minded brands to contribute and help us to fill almost four full tractor trailers with nutritious food for the Chicago area public school system, kids, and their families. Those are things that we couldn't have done on our website, previously. It's acquisition. It's also being able to share and drive engagement and take credit for the good stuff that you do, because it's not all about like what your revenue growth is or what the ROE has on your marketing spend. There's a component of just like doing the right thing that you know has a longterm ROI.
Chase Alderton: Absolutely. The word that keeps popping back into my head, you said earlier is purposeful. It seems like you come on board, everyone's hustling to just get stuff done and get things moving, but you hit a point where the experience needs to be purposeful. It's not just acquisition. It's not just ROAS, it's everything [inaudible 00:24:35].
Steven Gmelin: Yeah. Right.
Chase Alderton: Let's talk product really quickly. I know that everything is extremely healthy. You guys, like you mentioned, non-GMO all of this. You just launched seasonal flavors. That's the first time you've done that. Is that correct?
Steven Gmelin: Yeah. And it's so funny because coming from PepsiCo where LTOs, seasonal flavors, were just part of everything you did every large brand, at least had a component of limited time or early release for customer specific things.
Chase Alderton: [inaudible 00:25:09] over here working on that all the time. And they can spin something up whenever they need to.
Steven Gmelin: Yeah. Yeah. And they do an amazing job. And it was just something that within the category, we see it, we see a lot of larger brands than us do that kind of work. It was just a way to take your assortment and drive some excitement. And again, you talk about using the website to be a destination and to drive acquisition and excitement. When you're a small brand like Aloha, just because you have a new flavor, doesn't mean that every one of your offline retailers or even online retailers is going to take it. That concept or the myth of the endless shelf is not entirely true. You only have so many places where you can put those things. You build the value proposition out where shoppers come to you first.
Steven Gmelin: As we're talking here, my team is sending out our VIP audience a SMS early preview, an opportunity to buy another exclusive online flavor of our ready to drinks, which we relaunched this week. Our VIP will be able to access the new coffee flavored, ready to drink. We launched peanut butter cup bars about three weeks ago. And the the result has been so encouraging. Within about two and a half weeks, we hit the number one new release in the category on Amazon. Every single product review mentions, like, "Please don't make this limited. Don't be stupid. Keep it."
Chase Alderton: That's good feedback.
Steven Gmelin: Yeah. There's some very energized and rabidly loyal flavor enthusiasts that have taken very well to it. It's a strategy that we're going to continue throughout the end of the year. We've got a couple more exciting things planned and it's just great making super delicious food, that's so nutritious.
Steven Gmelin: Just to plug our R and D team and our ops team. I mean, the work they do to, to build this stuff is amazing where we're uncompromising in quality, ingredients, in principles. All of our food is USDA certified organic. We don't use ingredients like Stevia or sugar alcohols, not because they're fake. They're not fake. They just don't taste good. Or they're not as good for you. We are very deliberate about how we formulate. We use very tiny amount of cane sugar, coconut sugar, or the tiniest amount of Monk Fruit extract. All of our products ... I think the most sugar we have in any of our products is still five grams and less. It's just awesome to, to put food out there. My kids steal my peanut butter cup bars, they know where I've hid them and I got to stock up before they're gone, but I don't feel terrible about them consuming them, because they're just so healthy and nice, indulgent treat.
Chase Alderton: [crosstalk 00:28:00].
Steven Gmelin: I'm worried that they're going to topple that thing over and there's going to be a bigger issue on my hands.
Chase Alderton: Very cool. Definitely sounds like you're passionate about the projects and the brand seems like it's definitely coming together and growing and scaling. It's great to hear.
Chase Alderton: Let's move into a couple of closing questions for you. What is a piece of advice that you would give a brand who is in your same position, starting to scale, trying to scale, trying to kind of come over those plateaus and keep moving.
Steven Gmelin: Yeah, I think it's be willing to fail. It's such a cliche, but one of the things at PepsiCo and I brought this with me to Aloha is really this mindset of test and learn. Push the limits, test a lot of things. If you're not talking about failures in some of them, you're probably not doing it right. You've got to continuously try new things. I told Brad, before you hired me, he's like, "Well, I'm looking for a digital expert." "I'm like, I'm not a digital expert. I'm not an e-commerce expert," because there's really no such thing as an e-commerce and the digital expert. The field changes too fast. The technology, the tactics, the rules, the algorithms everything's changing so quickly that if you're not continuously trying to up your game to test and try new things, you're really not doing it right. I think that would probably be the most important thing and it doesn't have to be perfect. Just keep moving forward.
Chase Alderton: Comfort is the enemy of progress. Love to hear it. Last question for you. What do you subscribe to?
Steven Gmelin: Oh, wow. Probably, most of my subscriptions are digital. With four kids I've got just about ... I have an embarrassing number of streaming subscriptions. Whether it's Disney plus or Hulu or Amazon prime or Netflix. Pretty much all those exist in my house. Try to limit the television watching for my kids. But those are pretty safe ones. The one that's probably the most fun is I get an organic produce box and I get it every other week. I like it because ... As much as I've been involved in online grocery, I love actually walking the store and I'm kind of a retail nerd. I love being in different stores and formats and just seeing what's there. But what I like about the organic produce box is it gives me a lot of options. And I try to challenge myself to try something new each time i order. I like the convenience.
Chase Alderton: I'm right there with you. I actually like walking up and down the aisles and seeing the things and picking [inaudible 00:30:31] , but it's nice to have a box delivered to you when you can say, " I was never going to get this done. But now that I have it , might as well make us of it."
Steven Gmelin: Yeah. It's cool too, because the thing about these subscriptions that you subscribe to is it's really the ultimate compliment when you're building a subscription program. What we tried to do with Aloha it's the ultimate compliment from a customer that they trust you enough that they're willing to blindly receive things from you and give you money. It puts a, puts a lot of focus on the experience, and I think some of the subscriptions that are out there are some pretty awesome models that we look to emulate. And we've got a ways to go before we can get there as a brand, but really exciting to see kind of the rise of subscription and loyalty and how that impacts the total customer experience.
Chase Alderton: It's all purposeful. It's all intentful. Very cool. Thank you so much, Steven, for joining us.
Steven Gmelin: Thanks so much, Chase. Take care.
Chase Alderton: We want to thank Steven once again for joining us. If you're interested in Aloha, you can head over to aloha.com. If you're looking for more of our episodes, check us out at rechargepayments.com/hit subscribe, and to get the latest episodes, remember to hit subscribe on whatever platform you're listening from.