Look out Pringles, Matthew Parry of The Good Crisp Company is coming after you! | #405

Tim

I think I agree. I don’t know. You know like when I see McDonald’s offering a healthy hamburger option or a fast food outlet offering a healthy option. The cynic in me goes, you know what, they’re doing is just to position themselves so they can say we offer healthy alternatives but I’d sell any. I don’t know that for a fact but I’m guessing they don’t sell a lot. But it’s a positioning exercise but for you this is not a positioning exercise. You want to sell a lot, right?

Matthew

Yeah exactly and we should clarify we’re conscious as I said, we’re not a healthy chip. I mean we’re still a chip but we’re a better for your alternatives. So, there’s a lot of people, lot of millennials, lot of new customers that are looking for better options than what they grew up with. I mean you’ve got celiacs people that actually just can’t even eat gluten that are looking for those same things. So exactly we think there’s a big enough market of people that do want a better feel alternative. I mean not sacrifice on taste but just the better ingredients list that are willing to pay and willing to buy in volume.

Tim

Have you ever tested that or is that just you know a gut instinct?

Matthew

No look there’s I mean obviously a lot in the US and there are multi, multi-million-dollar brands that are just built purely on this premise. I mean Whole Foods itself is a multibillion dollar supermarket where all they sell is better for you. They won’t sell anything that’s got MSG, anything that’s got artificial colors and flavors, the whole supermarket. So, there’s not just brands, there’s retailers, there’s a whole industry built on that very premise that given the choice, there are an element of people that would prefer to buy a natural or a better product than one that is full of things that potentially aren’t good for them.

Tim

Why has no one up until now decided to take on Pringles?

Matthew

There’s a few reasons I guess your skepticism at the start was one of those. You know it’s a really big thing. But he is well the technology around the product and it’s not like a normal chip where you chop up a potato and fry anyone and lots of people can do that. There’s only a limited number of people in the world that have the ability and the scale to be able to take something like that on. We’re fortunate that we have partnered with one of those people. But you know, because Pringles is so dominant, they are billion-dollar sales themselves just in the US. So, no one’s really looking to go up against those guys on price on any of those things. But now with the rise of this growing demand for natural bet a few alternatives probably it’s been a timing thing as well. That market that we just talked about is now getting big enough that it does warrant the risk of going up against someone like that and to be perfectly frank, whilst we are in some regards I mean we’re never going to get the guy that’s happy to pay two dollars for Pringles. No questions asked, but there are a lot of people as we said I mean Pringles sales are down around the world and so we’re picking up some of those people that have walked away from Pringles. Still like the idea but unhappy with the product we’re picking those guys up so.

Tim

Why they doubt?

Matthew

But because of that all is in and even in Australia Tim, you see mainstream original chips are down. What’s growing is you know Red Rock is, Kedah all these exciting premium natural ones are growing.  You know you see Coty’s is down in mainstream markets you know fizzy water and that is up. You know that’s just the general shift that we’re seeing in the grocery well.

Tim

I’ve got to ask how first of all explain to me how the common potato chip is made and then how a Pringle or a good crisp company chip he’s made.

Matthew

Yeah so. Exactly. A chip is not, you can make those at home you slice up a potato and fry it and then flavor it. That’s how a chip is. That’s it. With ours obviously a canister chip is the form is perfect every time. And so, it’s using a potato flakes rather than like a whole potato molded into the shape and then it goes through a similar frying flavoring perspective, process. And so even in itself it’s not difficult to make a natural better for your alternatives to Pringles. So, we just don’t know why they have a Pringles is you know multi-national they just put anything in there they go for price. It’s just a different mindset as to what you value over you know, what what’s important for you and the bottom line. So, it’s not a difficult process it’s just done there’s only people that do people that could do it on a scale to take on

Tim

Why, is the technology that complicated or expensive is it?

Matthew

It’s expensive and I guess the demand for canister chips is relatively small compared to Bagged chips. It’s still a big market but when you put it up against you know the billions chip and salty snacks that are sold around the world in the bag format, it’s a relatively smaller market. And then of that market Pringles has had the dominance of it up until now.

Tim

You’re not the second canister chip, are you? I mean there are other.

Matthew

Yeah, I mean Lays is. And then there’s private label and that’s been I guess for us because.

Tim

You’re the first sorry, you’re the first canister chip that is a healthy option, right?

Matthew

That’s correct.

Tim

What is it about cannister, I never heard this phrase catastrophic. What is it about the canister chip that, I mean for me they’re kind of fun to eat. The OCD in me loves the regular shape from the stack what you get. Is that being what it’s all about?

Matthew

Exactly. It’s just a novel way of eating chips. I mean there’s nostalgic around that. We all grew up with Pringles. We all remember popping, and not stopping and all of those things. So, there’s nostalgia around it. It’s fun, it’s different, it’s you know, there’s sealable lid for road trips, travel things like that are some functional benefits. But yeah, it’s just another way of eating chips that we’ve grown to like and enjoy

Tim

Yeah stick with me here Matt because what I’m about to say is it comes with all respects. There’s a couple of things one is you kindly sent me some samples to try which I did and shared them around my family of which I have one vegan daughter, one son who’s arming as to whether to become a vegan but he’s vegetarian. I have another vegetarian son and my wife goes either way with food that is.  Now I have tried your chips and you know I’m a big taster. You know I need big flavors and that didn’t hit the mark for me. I don’t know whether I’m in your target audience or not. The barbecue just didn’t have that big barbecue flavor and all that stuff. And I didn’t travel very well. I don’t know what happened but it looks as though we’ve gone a few rounds with Cottam McGregor before arriving at my place. They were all sort of shattered.

Matthew

That’s the joy of sending things through Australia Post that I think the more fragile stickers you put on there the more times they kick it. So yeah look it is that that unfortunately is a problem with our samples but we sell millions and a product around the world in supermarkets and without a single complaint. From ship. So, when it travels properly on a pallet put on shelves not a problem whatsoever but you send a box through Australia Post and it ends up exactly right like shards of chips so yeah, it’s something we have to try and do with.

Tim

It’s pretty annoying because they’re getting them out is particularly hard. Anyway, ah don’t get me wrong I think it’s a great idea. Anyone who takes on a big brand I love. Now you launched in the U.S. in 2017. So yes, less than a year ago you are already in 2000 supermarkets around the US which I’m guessing is a very, very small percentage but an impact on you is nonetheless. And you’re in the top ten fastest growing brands in Whole Foods. And as I said at the top of the show you’ve done 5 million you’re hoping to do 5 million dollars of sales in 2018, of no sales a year ago. What has been your secret?

Matthew

I think it comes down to having a product that people want. It has been probably the refreshing thing for us. We’ve launched numerous products over the years that said, not in the US but here in Australia, and it has taken us by surprise as well. I mean we don’t do much advertising, we do store support but not a lot but it’s just been this groundswell of demand for this style of product to have a look and at most people like great tasting product but without any of those things in a form that they can’t get elsewhere. I mean the other thing is as I mentioned Wholefoods for example doesn’t sell a single canister chip in their whole supermarket. They won’t have Pringles because of the MSG, because of the GMO ingredients. So, we’re the only canister chip in that whole supermarket. So people that want that product will happy to buy ours and there’s a lot of natural supermarkets out there in the US. A lot of customers looking for that sort of thing. And so it’s really just started to take off and it’s come from the consumer which has been a really refreshing thing. We haven’t had to pump millions of dollars and celebrity endorsements in all of this to get noticed. The product itself is what’s driving it.

Tim

Why did you launch in the US? You’re an Adelaide based company.

Matthew

Yes, look it’s just time and chance really. We went across to the US to a trade show at the Expo West which is the largest natural product show in the world to look for ideas to bring back to Australia. So, we walked that whole show and there were a few ideas and a few trends we saw and we thought well hang on no one is actually doing what we’re doing. No one doing around this sort of this stack chip option and so that’s where the seed of the idea came and we had some contacts and we reached out to them and got in front a couple of buyers and customers and they got excited about it. And so, the opportunity really came from there and I mean to be frank if you’ve got an opportunity to launch in America vs. Australia was the logistics and travel is different the size of the market and the appetite for the product is just so much bigger than what we were getting here in Australia that we bite the bullet and went for it.

Tim

Just to be clear. So, you’ve gone over to a trade show in the US and you have seen a whole lot of products and a whole lot of trends that would have been easy enough for you to bring back to Australia and launch somewhere in the world. If you had the interest instead you’ve gone to a trade show and identified an idea but you didn’t see

Matthew

A reverse concept. That’s the entrepreneurial spirit isn’t it. You see an opportunity, it sticks with you can’t shake and now we’ve got to at least give this a try.

Tim

Good on you. So you’ve gone back. I mean I don’t know what your experience. I mean your ABC services in which you are a shareholder has launched a number of products but again I guess what is the interest in interviewing you is around the fact that you’re taking on Pringles and launching in a not in your local country or currency or market or whatever it is. I mean it’s interesting is there was no wall. I’m sure there are people who said You’re mad. What did you say to them?

Matthew

Yeah well, we did but I guess we just took sort of a step by step process so it was okay. Is there even a demand for it so we went back to the show the next year but this time we exhibited. We just put our products on the table and thought well let’s just see if people even like this, even want it and from that the response was amazing. Now this is, I think it is about 3,000 exhibitors and 70,000 people to tried only come through the show. So it’s a great way to I guess get a lot of feedback really quickly from industry and you know to be honest Tim you say people say we’re mad but at that show not a single person said that. Every single people were giving us the slow clap from down the eyeballs saying yes this is such a good idea. You’ve got to do this.

Tim

What do you mean?

Matthew

So that we’d see our product that just you know in the great American why we’re just excited for us to say absolutely we need this product. You’re doing the right thing you know he’s my business card as soon as you are on shelves you know you’ve got product let me know and we walked away with a suitcase of business cards and so it was those sorts of things that reinforce us, that obviously was a lot of things we needed to research and a lot of things to get right. But if we could get those things right we were confident that in the end there was that there was a demand for that product. And so it just went from there and so you just start chipping away. Okay well what’s the regulations, what’s it cost us to get it there, what other products sell for and you just start doing your Excel spreadsheets and ticking things and until we got some product down on shelf.

Tim

Don’t mention Excel spreadsheets on this show Matt you’ll send the host to sleep

Matthew

Well now you’re going to make you make money at the end.

Tim

Oh yeah, I’m chatting with Matt Perry. He is one of the shareholders at ABC services in Adelaide and FMCG based company and they’re take on Pringle’s with their brand with The Good Crisp Company. How do you protect Matt, an idea? I know there’s a lot of people listening who have got a lot of ideas and they’re too scared to put them on a crowdfunding site like Kickstarter. They’re too scared to talk about them in an open forum because someone also I’ll run off with them. What’s your view on that?

Matthew

It’s something we think a lot about and going back to your comments or we’re taking on you know Pringle’s. It’s a massive, massive company. They’ve got all the resources in the world, so what do you do? Do you try and hide from that? And in the end, it just comes down to my opinion, going fast and going hard. You know it’s one of the things that attracted us to this market of the cannister chips is the fact that not a lot of people can do it. So there’s some natural sort of competitive advantages and natural barriers around that and I would say if you don’t have some of those, if you’re paranoid if your idea is that easy to be copied, that even just talking about it means that it’s no longer really a valid idea and anyone can do it. Well I think there’s probably you need to look at your competitor advantaging all but so it should be a natural protection around that and then it just becomes, well let’s hit it hard, let’s be first to market, let’s be authentic. And whilst we talk about yes, the form is the same as Pringle’s we try and be everything that they are not. So totally different ingredients, we use more potato, we use all these things so there’s some difficulties in there that big companies have difficulty changing up things but equally as well you know this is a company that I founded on the face of. We build personality around our brand. There’s something that Pringles could never be, it’s a faceless competitive product. We play in those areas so there are things that even though size is different, there’s some things that are negated regardless of how big you are.

Tim

Is there a patent clearly not around the form of a cannister Chip?

Matthew

That originally was I think back in the day around this style and they do a unique twist style. So, our product actually is slightly different to it. But it’s my understanding that Titan is no longer enforceable anyway but ours is a slightly different form to the chip.

Tim

Yeah, right. If Pringles knocked on your door. I’ve got Pringles on the phone for you.

Matthew

They haven’t, no. We will stay under the radar as much as we say that yeah you sort of don’t worry you do just sort of keep your head down and work hard. And you know before we can build to market share before we pop up.

Tim

I recently chatted to Damian Leigh who is the creator of Mr. Lee’s noodles which is essentially the instant noodles of what you’re doing a very clean, as clean as it can be product. He’s had a dream run, absolute dream run and getting this product to market. Albeit he has an incredible personal story of confronting not one but two primary cancers that he’s overcome. Getting his product to market has been incredibly easy. It feels the same for you.

Matthew

I would I would agree. I’m hesitant to work but we have found the case and that’s almost why we’ve continued to invest in the U.S. I think because the reception has been really good. Now it’s one thing to get on shelf. You have to then get the velocities to remain and hold your position here and that’s where we’re sort of at the moment. But early indications are really good. And retailers are receptive to what we’re doing in the product that we’ve got and so I think I mean that’s one of things I mentioned sort of at the start is that the demand has been the big thing that’s helped get this product over the line. And so, if you have a good product that people want, it certainly makes it easier than being you know oh we’re the fifth paleo natural energy bar that you’ve got you know that is a difficult proposition as the hey we were only one of the only ones in the market doing it. This we can bring you into sales you can bring customers that have gone away from this category back into your category. It does make it an easy sell.

Tim

I’m always interested to hear how the small business owner like yourself gets a seat at the table of a company like Whole Foods. How did that come about?

Matthew

It just bit partners with the right people to be frank. So, we obviously have no influence had no real contacts in the US but through the trade shows and through showing the product to people we were connected up with various sales teams and brokers in the US which is a lot how the market works. You have to hire a broker team that goes out and then makes the presentations and sell it and we were fortunate enough to basically there’s the #1 natural broker in the US, which is presence marketing. They get presented thousands of products a year and only take a handful of the ones that they think are the best.

Tim

So how did you get a seat at that table?

Matthew

We sent our smashed-up sample not unlike you, Tim and thankfully their reception was a bit more positive. And so, they said look you know and they got the idea. Look we’ve been waiting for this. Bill, the owner rang us up personally said, hey look this is something we want to run with and we’ve just been extremely excited to partner with those guys and they’ve opened the door and at the end of the day, you’ve got to have. I mean it can be a great product is one thing but the retailer needs to make money, it needs support, it needs all of that and so we did a lot of homework behind all of that and use their experience to ensure that you know the numbers were right, the margins were right, the stock turns were right, we were prepared to play the game, invest what we needed to. But if the retailer’s a bit more confidence in the product, they don’t expect as much support from you as they would if they’re taking a bit of a risk. So, it’s partnering with the right people really is has helped us get a foot in the door.

Tim

That fellow Bill says to you we’ve been waiting for this. It makes you think what else has he been waiting for.

Matthew

Yeah exactly. There’s you know there’s a lot of opportunity out there and I guess it’s just see opportunity and grabbing for that but how many other conventional products haven’t sort of been replicated in a natural form in the market. It does make you wonder.

Tim

It feels like that right there is the nub of a massive business. How many conventional products have not been recreated in the natural form. I mean where do you start?

Matthew

Yeah exactly. And there are a lot, we don’t see much of it in Australia. But there are you have Justin’s peanut butter which is a multi, multi-million-dollar company sold for you know X times revenue recently because it was a natural version of peanut butter. You know so they are ticking them off the list as quick as you can think of and that’s for sure in the US but there’s plenty more out there.

Tim

Wow that’s exciting. Yeah. Just write it down I’m just going to go away and you know go to the supermarket.

Matthew

And taste is really the key as well because you could replicate the ingredients but if it’s not the taste isn’t there, people want without sacrifice some but there’s a level there about how much they’re willing to sacrifice in order to get the benefit of the ingredients or the benefit of the product.

Tim

Do you think products like yours and Mr. Lee’s noodles which I haven’t tasted, I will by the time this episode goes live? But do you think that you are more likely to be bought by a millennial than someone like me whose taste palate has kind of grown up with big flavours and a whole lot of chemicals whereas the younger people are not so used to that?

Matthew

If our Instagram feed is anything to go by Tim, I would say yes. We are full of mums, new millennial mums, full of people like that. So, it is a lifestyle choice around it. So people say hey, look I want to stop eating those artificial colors and flavors or whatever and that does well it’s not solely millennials it does tend to be more of a focus for them. And then most new parents these days tend to live in that millennial and that’s when people start to rethink what they’re putting in their mouth and their kid’s mouth when they’re new parents. But equally we hit into the people that just can’t eat any gluten they can’t eat MSG.  If you’re talking 10 percent of the population are celiacs or on a gluten free diet. When your population is 350 million, that’s a lot of people still won’t buy the competition but we’ll buy you.

Tim

What’s the most effective marketing you do for The Good Crisp Company?

Matthew

At this stage we do a lot around Instagram. We do a lot around but we’re just starting to do more actually around influencers and tapping into that market. We saw it as a sort of a two-stage thing of, you know we launched not even 12 months ago and so there was a process of actually building a following and building an awareness and we’ve sort of hit the 3,000 or so mark on Instagram. And look that’s probably enough that we can start, you know we’ve got a bit of a community there that’s passionate, let’s stay instead of us keep talking to them. Let’s bring in some peers. Let’s bring in some influencers and amplify that message from there.

Tim

What’s an example?

Matthew

So, we will connect with and once again we look at influencers that are either strong in the celiac community, strong in the millennial community, strong in the healthy eating lifestyle. What are those people reach out to them?

Tim

How do you reach out?

Matthew

So, we will find or identify them either actually interesting enough they’ll start the bigger you get they start appearing to you. They start reaching out saying hey we love your product we love what you’re doing you know could we have some free product to do a post on it or Hey, we charge 200 dollars to do a story about your product will you be interested. And so then it’s either finding ones or looking at those that have reached out to us and saying, yeah let’s partner with these, build a calendar over the next six months.

Tim

Can you think of what the most successful influencer has been for the brand?

Matthew

It was early days for us. We’re just starting off now basically in January of this new program. But already you start to see people with 50-60,000 followers. You know they do a short 30 second Instagram story on your product and these are authentic ones that have just popped up recently not necessarily the ones we’ve paid for. And then you just see that go out to all their followers and you just say bam we get it over the next day or two another 100-200 people joining our Instagram page commenting where do we find it driving them to our Web site to look at our store located and find products.

Tim

So when you do that. Instagram’s global, you are in whole foods in the States, you’re on Tiger and Virgin in Australia, where else can people buy your products in Australia?

Matthew

Yeah. So in Australia when they’re saying to get out through the independence and IGA and places like that’s where our distributor. In the US as you mentioned we’re in a few thousand supermarkets which is a drop in the ocean but it’s a good spread across the whole of the country. So most people can find store in the arts. We actually invested it was one of the things we invested early on is a store located it ties into actual store data. So if a product scans at a supermarket within I think three weeks or so it appears on our store locator on our website automatically. So we’re getting real life up to date information when people plug in, hey I live in this area they’re getting all the stores around them and staying up to date. That’s something we saw. It’s a really big need for us because you know that’s a common question when you got something the size of the US and we were in such a small market at the moment is where can I buy it. So how do we provide as much information around that because at what he sees conversions from all of the marketing that we’re doing. It’s if we’re driving people to store that then makes it worthwhile. If we don’t, then you know we can do all the influencer marketing but we’re never going to get a sale. So we do that Amazon is also a big part of what we’re building. Obviously, our biggest challenge for that is the postage side of things and Amazon deliver even less than Australia Post. But I mean even that said today, we’ll probably do, we have a target of about half a million dollars through Amazon this year and we see that being easily a million or two based on what we’re seeing other brands do in the US.

Tim

So how do you manage that, and travel well so what?

Matthew

So it’s about packaging, it’s about wrapping, you know all of that sort of stuff and how do you do that with the costs and things like that. But we think we’re getting the answer there. And equally there’s people that you know are still coming back and saying, oh yeah look half the pack was broken but it’s still the product, still taste great. I still can’t eat the other ones, I’m prepared to make that sacrifice and so you know that’s why we’re selling you know couple of thousand a week through Amazon as it is anyway.

Tim

Your focus is going to continue to be the states?

Matthew

It will be because we are an Australian company, we want to see it grow here in Australia as well. We see opportunity here; the same thing same reasons were successful at the moment in the US are the same triggers we’re seeing in Australia. And so, we do want it to be here. So there really are two areas of focus.

Tim

Are they’re made in Australia?

Matthew

They’re actually made in Malaysia. So that you know the area of global to surround it and that just comes to the fact that you know, there’s not that many people in the world that can make this. We’re partnered with someone that we’ve been working with for, our company has been for over 30 years. They’ve got the scale, they’ve got the quality and so that’s where we get the mind over there with our co-pack.

Tim

Now that you caught, well you haven’t exactly mastered it but you’re getting close to mastering the good crisp company, are you going to go back to Bill and say Hi Bill, what else you’ve been waiting for?

Matthew

Exactly. And I guess really it comes down to, we’ve got that much scope as you said, we’re in 2000 stores. It should be in 10,000 stores. So, there’s still a lot of distribution opportunity for the current product but absolutely we’re investigating new flavors, new ingredients around that. I mean what else is that, It doesn’t just have to be potato. Can we start using other ingredients around that? So there’s a whole pipeline of new product development that can be put under that brand. Absolutely.

Tim

I’m sure there’ll be a body kale chip at some point. Kale canister.

Matthew

With extra protein.

Tim

I love it. Well good on you mate. I think any brand that takes on the big guys is worth chatting to and finding out more because it’s not a small decision you know. And they’ve got a lot deeper pockets than you but it sounds like you’re doing the right thing in your positioning yourself in a way that you know, maybe they don’t care maybe they go. I’ll let them have that market.

Matthew

Exactly. If we could take 10 percent of their market, that’s still 100 million dollars in sales. So, you know I’m happy with that.

Tim

Good on you buddy. Thank you. thegoodcrispcompany.com.au and dot com Your running to website, I think. It’s where you can find and buy them. Really appreciate you sharing those insights.

Matthew

My pleasure Tim. Thank you.