Morgan Zanotti 00:03
I'm having to say no to retailers, because I just don't want my distribution to outpace my awareness, and then you have products on shelves that no one's buying. That's kind of like a nightmare.
Narrator 00:13
Welcome to the E comm Show podcast. I'm your host. Andrew Maff, owner and founder of BlueTusker, from groundbreaking industry updates to success stories and strategies. Get to know the ins and outs of the Ecommerce Industry from top leaders in the space. Let's get into it!
Andrew Maff 00:27
Hello everyone. Welcome to another episode of the E comm show as usual. I'm your host, Andrew Maff, and today I'm joined by the amazing Morgan Zanotti of who founder of Waay. Morgan. How you doing? You ready for good show?
Morgan Zanotti 00:39
I'm great. Always ready, yes!
Andrew Maff 00:41
Beautiful. I am so excited to have you on the show. One thing I'm going to jump to only because I got so excited when I saw it actually two things. One, huge sparkling water fan. It's basically all I drink. So very excited to talk to you about Waay. But also, like most of my fridge is Primal Kitchen, which I know is your background. So super excited to have you on the show and hear your story. I always like to start these start these out pretty stereotypically, to just kind of give you the floor and just tell us a little bit about, like, your background, how you got started, and then obviously, take us into Waay.
Morgan Zanotti 01:10
Cool. Yeah, grew up in the Midwest, like typical 90s childhood of the Midwest, so it was a lot of like, processed food and playing until dark in the backyard I had a little I had an accounting degree, quit my job, I ended up moving to South America and traveling for two and a half years my early 20s, I had my own like, health revelation around that period, kind of like, stopped drinking, cleaned up my diet, noticed a lot of changes personally, and then just became obsessed with health, health and wellness. Worked at an advertising agency, and then I moved to LA in like, oh God, 2012 so I was like, maybe 28 at the time. Went to run marketing for a brand called Kavita. They sold to PepsiCo for, I don't know, three or four, three or 400 million a little shortly thereafter. So I was there for a little bit. And then I met this guy, Mark Sisson, who was considered like the founder of the Paleo movement. If anyone remembers when the Paleo movement was sweeping the nation. We were he's really like a thought leader in that space. We had a big following online. He was like blogging before blogging was cool, and doing paleo before paleo was cool. So had a audience, and was selling supplements and wanting to bring a food product to market. So I worked with Mark on primal kitchen as a co founder and president of the company for, oh God, like eight years. Three years in, we grew the business to 50 million in revenue with 2 million of EBITDA and sold it to Kraft Heinz for 200 million in 2019 then I stayed and ran Primal Kitchen for five years under Kraft Heinz ownership, and then I left a year and a half ago. I'm actually still on the board of Primal, but I left in my dated, like, full daytime operating role, and launched my new product, which is a sparkling protein water. So it's like a soda meets a sparkling water with 10 grams of protein, and it's called Waay with two A's.
Andrew Maff 02:53
That was awesome. That was a that's it all, first of all, amazing background, but it felt like you've said that a billion times to people, and it was just flawlessly, well crafted, amazing background. I love that. Congrats on the exit. That's awesome.
Morgan Zanotti 03:09
Thank you.
Andrew Maff 03:09
But I know we're here, we're talking about way, so I want to talk about way. What made you what hole in the market did you see? What made you kind of think of going in this route?
Morgan Zanotti 03:14
Yeah. I mean, I've been obsessed with health and wellness for a long time, and I also have worked in CPG for a long time, in consumer packaged goods, right? So I feel like I'm pretty on. I know a lot of what's happening in the industry. I like live and breathe this personally and professionally. And I discovered clear whey protein isolate, like, a year and a half ago, and I just remember thinking to myself, How did I not know this exists? Like, ISO peer's been selling protein water in a glass jar for decades, and I'm like, What are we doing? Like, I'm drinking four LaCroix a day. I'm a millennial mom who just wants to hit my 100 grams of protein goal, but, like, doesn't eat even three meals a day. I'm like, eating kids leftovers for breakfast. Maybe I'm like, grabbing a snack in between calls as I work from home for lunch, and then dinners kind of just like thrown together some protein, veggies and whatever. So it's just like, hard to find the time to eat. And I was like, All right, I'm drinking four Lacroix a day. They taste like dirty socks. It'd be great if one of them would work for me, like we have to figure out how to get the spark the protein into the sparkling water, and then it ended up coming out. I did an RnD for 18 months, and the product ended up tasting much more like full flavored. So I would say it's really more of like a lighter, lighter soda experience than it is like sparkling water experience. It's got a lot of flavor. But yeah, so I Waay was born, I came up with the idea. Tried to talk myself out of entering beverage, because it's an absolute disaster of a category. For 18 months, met with whole foods. They took it nationwide. The universe just kept pushing me. Like, I was like, Oh, am I really going to do this? This is crazy. And then the universe was just like, you need to meet this person, and then this opportunity to present itself. And then Whole Foods took us nationwide, and then I basically finally found a formula, found a co man, picked a logo, did the package design between April and August, and rolled out in October of this year nationwide at Whole Foods.
Andrew Maff 05:08
That's wild, like doing all of that in that amount of time, and it seems like the stars kept aligning, which is always fantastic. Getting into Whole Foods is awesome. I know one of the issues with retail has always been, especially in the beverage space, has always been like, they need to make sure that you have the sell through. And so in order to have that, you have to have the education side for people to even understand what it is, what's been, what's been the approach for that thus far?
Morgan Zanotti 05:33
Yeah. I mean, we were like, so behind on the launch, to be honest with you, because I was just scrambling to get product made in time that I feel like the things at Primal, we like, had product ready. It took us two and a half years to commercialize the mayonnaise at Primal. So by the time we ran our first production run, I had, like, run a campaign. I remember someone was like, this campaign, hold the canola is annoying me on Twitter, and I felt I was like, Oh, I've made it as a marketer. I've, like, bothered someone on the internet, right?
Morgan Zanotti 06:00
I just had a lot more prep time to launch this time. It's like the launch is almost happening right now. Even though the distribution rolled out in October, the rollout was really slow. We had to hire third party merchandisers to come in and get the product on shelf. It wasn't rolling out like it was supposed to, which is pretty common. And then, you know, who's really buying protein or water in the months of November and December, like it's not a big beverage season, and it's not a big like better for you season. So we put a lot of money towards just like in store demos in January, and then we actually launched on Amazon. We made the decision to go Amazon and not our own D2C, simply because beverage is just a velocity it's like, a volume game. So yeah, I didn't want to, like, I wasn't trying to be precious about, like, preserving margin and building this super profitable D2C business. I'm more just like, need to get word out there so I can win this race that is protein water, and it's very much race right now.
Morgan Zanotti 06:57
So we launched on Amazon, like, a week or two before we launched at Whole Foods. And for those of you listening like, Amazon owns Whole Foods, I don't know most people know that by now, but in case they don't, they're very disjointed. Though, it's not like the Amazon people are talking to the Whole Foods people that much like, I'm sure there's operational synergies, but like, as far as just like working with the two, it's still totally different. So I have, I've actually been shocked at how fast Amazon has taken off. I think what I underestimated dramatically. I assumed in my, like old school thinking, like beverage is a distribution game. You just need to be in as many doors you need to drive velocity. It's not an ecomm play. And, like, Amazon ramped way faster than we ever expected. Like, way faster, yeah, like every month we're upping our forecast, and then we're out selling our forecast. Like six days into January, we had doubled our forecast from December to January, and I think we had to increase the forecast already in January, because we can't keep the product in stock on Amazon. So that has been a decent problem. Yeah, that's been really great. Um, yeah.
Morgan Zanotti 08:06
So I, I think what we're doing nowadays, it's just so interesting when you when we launched Primal in 2015, if you wanted to get, like, a press article, if you wanted to get some press right in the New York Times, you'd like schedule a PR tour. You'd go to New York, you'd meet with all the editors, you tried to get someone to be your best friend, and then you hope they wrote about you. And at the same time, there were other publications, like mind body green, or some of these other like online platforms that were doing, like paid emails with affiliate commissions. And now it's like the regular media has caught up to that. So if you go to pitch like a New York Times article, they're going to be like, what's your Amazon link? Because they want to make the affiliate commission. So I think there is something really nice about being on Amazon if you just want scale. I think people are just, there's no friction for checkout, you know. So I don't know that's been kind of, you know, an unlock for us, but we've mostly just been doing our own email marketing, influencer seeding, a little bit of PR in store demos at Whole Foods. And that's kind of like the machine that's going.
Andrew Maff 09:18
Yeah, the, you know, the Amazon side first, your logic makes a ton of sense. What I'd be interested to hear your thoughts on is like the I've always found that the biggest issues with Amazon when you're launching a completely new product is like, the ability to educate the market is effectively non existent, because they have to be searching for the product already, and then they have to pay based you have to pay for them to click to then get to your listing to then learn about what the product is and why it's being differentiated. I'm not familiar with the protein water market as much as I. I'm sure I'm going to be one day. But what like is there a lot of competition and already a lot of search volume around it, and you're just kind of paying for those spots? Or is this coming from people already searching your brand name?
Morgan Zanotti 10:01
So 40% of our traffic today on Amazon, or 40% of our revenue, is attributed to just like organic search. So people who are like searching for Waay or maybe they came and they, I don't know, they saw it on social media, and they just like, went and searched it online, or they searched a competitor, and we, we showed up. We're certainly like bidding on keywords. We're not spending a ton. Like, you know, our ROAS is, like, around 3x on Amazon right now. And like, like I said, 40% of the sales are organic. So it's not like we're just, like, pumping hundreds of thousands of dollars into Amazon ads, and that's how we're educating. I really think you need to, like, educate elsewhere, like your newsletter influencers, etc, and just make the checkout process for people who've already heard about it really easy on Amazon. One thing we are doing, I know Amazon has, like, its Amazon creator like, where you people can just like, creator connections, creator connections, they can like, do their affiliate program. That way we have actually like created coupon codes with attribution links specifically for influencers. And we're giving like, 20% commission, and then we save 10% on the attribution link, and they are giving their audience 10% I don't know we're, we've been playing around with that a little bit too.
Narrator 11:11
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Andrew Maff 11:46
And that approach makes more sense. Creator connections, I don't know that. I've come across more than like, a handful of brands that have seen success with it. It's a very kind of unknown area, and a lot of influencers don't even really like it, so going directly to them and just setting it up with their own coupon makes a ton of sense. Yeah, the, you know, the messaging and the and the overall esthetic of your brand, it's very catered to a pretty specific audience you've got you're kind of aligned with, like the poppies and the ollie pops the world and things like that. So is, are you thinking of leaning like Tiktok and going towards more like the Gen Zers? Or is this or you keep and millennials, I would say. But are you opening it up? Like, are you trying to follow in the footsteps of Poppy?
Morgan Zanotti 12:28
Anybody, following the footsteps of Poppy, what a story? Sure. Um, yeah, no, I think I'm having a little bit of an identity crisis. Like, I think we'll learn, right? It's a weird product, because we could sell into sparkling water in store, in retail, right? We could sell into sparkling water. We could sell into the protein set. We could sell into functional beverage, or we could sell into soda. So it's not very often you launch a brand like Primal Kitchen. We never were like, where should we which buyer should we present to? It was like, You're selling mayonnaise. This is the person you talk to. Mayonnaise is in one place in the store, right? Like, yeah, so it's I, and I think it's a new enough segment of the beverage. It's very new. Like, I would imagine 96% of people that don't even know protein water exists. Like, I don't, yeah, it's pretty, a pretty new segment. I came up with the idea, like, almost two years ago now, and there was, like, maybe one other new player on the market, aside from, like, ISO peer, which I don't even they're kind of like a dinosaur.
Morgan Zanotti 13:30
And now, like, there's been, like, every week a new brand launches, a new protein water. So it's definitely having a moment, you know, for all the reasons that just make sense of trends that are going on in the world, but yeah, so I don't know. We have to kind of decide we're going to learn. We're going to, like, test and learn if what we want to be when we grow up, and figure out if we, like, lean more into soda flavors and go more there, or if we stay in functional beverage. It's like a It's up in the air. We're like, three months old, so we're not even in the first inning yet. We're like, we're warming up right now.
Andrew Maff 14:03
Yeah, I mean, look, you've done an amazing job. I mean, we're not exactly like the world's most like exclusive podcast, but we try to put rules in place of, like, who we're going to bring on the show. I don't think I've ever had anyone in here that's only three months in, but you still are light years ahead of some of the brands we've had on the show in the past, which, no, hope didn't hear that. I mean, in a nice way, but like, like, it's, it's really impressive of what you've done in the short amount of time. And I really wanted to have you on the show, because what I thought was very interesting is you're, you're growing so fast that a lot of companies end up in that situation where it's like you almost grew too fast and you couldn't fulfill or you couldn't get the marketing aligned, and that becomes kind of a bigger issue. What's your thoughts on how you're I mean, you've done it in the past, so that's a little bit of a that's a benefit to you, that you already have the experience and how to deal with that. But what's your thought on how you're going to tackle things as you scale at the this rate that may not always maintain?
Morgan Zanotti 15:04
I mean, it's weird. When we launched primal kitchen, we went into whole foods, like regionally, like at the time, you could sell into one region Whole Foods, right? We but to be fair, Primal Kitchen's, we did one and a half million our first year, then 13 our second. And then 26 and then 50 the year, we did 13 million revenue. 50% of our sales were on ecomm. We were really, did, really heavy on Thrive Market. Mark, my partner was an investor in Thrive. So we pushed. We just decided, like, we don't want to deal with Amazon. I Amazon was like the bane of my existence the first three years of my Primal Kitchen journey. Like I hired it was horrible. We couldn't it was always like, something was always wonky. It just was, you know, I don't know you remember Amazon in 2015 It was a disaster to deal with them.
Morgan Zanotti 15:50
But it's still, yeah, I guess Fair enough. I like, we have someone fractionally, who, you know, has navigated, like all that for us. So that's been a huge unlock, just like having the right partner there that you're not, like, paying, I'm not paying a commission. He's a flat monthly fee, super reasonable rate, and, like, really on it for us.
Morgan Zanotti 16:09
But, yeah, Primal, our distribution, this is my biggest fear right now at Primal, our distribution, just organically, was slower. We started in a few regions of Whole Foods. Six months later we were maybe nationwide. Sprouts didn't come on until a year or two later. We just wrote Waay rolled out nationwide in sprouts, like last week. So we're nationwide in Whole Foods as of this month. And then, like, we got the company to 50 million in revenue, and we had never done $1 through the register at Walmart, Costco or Target. So there was just so much white space for, like a for a strategic on the exit side, and distribution at Waay is happening way faster, pun intended, than it ever happened for me at Primal, like I'm having to say no to retailers because I just don't want my distribution to outpace my awareness. And then you have products sitting on shelves that no one's buying. That's kind of like there. So, you know, I don't think, I think Sprouts and Whole Foods are like, nimble enough where you can do a lot, like, you can get in at Whole Foods and do demos. Sprouts has a great partnership with Instacart. You can over spend there. You know, there's lots of things you can do in both of those retailers, but when you start to get in, like the Targets, Walmart's of the world, it's a little more like, don't run your dress rehearsal on Broadway, right? Like, you gotta, like, know what, yeah, before you get in there. So it's hard to say no. We said no at Primal to Walmart. Like, in our second or third year business, we were like, we're not ready. Like, No, thanks.
Andrew Maff 17:39
Yeah. So smart move. Are you thinking of leaning into DTC at any point, or are you going to stick to leveraging Amazon, my biggest sales channel, like, it's crazy, like your own site?
Morgan Zanotti 17:50
Oh, I think we will. We're going to launch powders this year, and I think we'll put those live on our own site. We are. We did onboard shop my, so we're going to start gifting out of that platform and, like, get something interesting going there. I'm curious your take on ShopMy but it's crazy what they've done. I feel like, what's your take?
Andrew Maff 18:07
I don't have a ton of experience with it. I've seen pros and cons through different brands we have using it, and others that are still doing it in house and stuff. But I think it's kind of a newer approach. Like, are you if you're starting to lean in on the shot. So are you, if you're doing that, are you doing the Tiktok side at all?
Morgan Zanotti 18:27
With ShopMy or you mean, just in general, we need, we will in January in this month. We weren't, like, operationally set up where we could do it, but we moved into a new 3PL like warehouse for fulfillment, and we're going to do that. The other thing that's crazy that I didn't know about you probably are aware of this, but like me, my the marketing girl on my team was seeing like a million CPG companies are fulfilling this whole fulfillment of your own product samples through Amazon is crazy. Like we priced out shipping like, influencer packages from our 3PL and then just having Amazon ship a variety pack from the inventory we have at Amazon. And it was like $3 cheaper per package to just have Amazon fulfill our you can, like, upload excel, yeah, you know this. I didn't know this, no one.
Andrew Maff 19:16
That was what I was going to ask is, like, why not just have Amazon fulfill at all? Yeah, through, like, MCF
Morgan Zanotti 19:20
With TikTok shop, we can. We think we will, yeah, yeah, yeah. So we're moving that way. The problem is we're out of stock, like, our at Amazon, we can't ship. We don't have, yeah, no. I mean, we're in stock, but we're like, re we're building out our variety packs and shipping them and to Amazon. So, yeah, you're like, you, you're my like, greenness on the DTC front is really showing here. But everyone I was on the call, we were all like, my ops girl, who's, like, very experienced in CBG, and my like, fractional CMO, who's works on, like, she's from Kraft and works on like, 10 brands. We were all like, Wait, Amazon will do your like, gifting fulfillment for you. Like, who knew this? People don't know this. You knew this?
Andrew Maff 19:44
Yeah, we're on the where I'm on their advisory council. It's like, all we do is talk about Amazon fulfilling stuff, and yeah, MCF and the Buy with prime team, and been on it for a couple years now. Yeah, it's a fun little it's an interesting world. I personally will end up on a rant here. But I personally feel like Amazon is leaning really heavy into their fulfillment business, because I think that for most brands, they're starting to realize how complicated it is to grow on Amazon because of the competition, and it's kind of a race to the bottom. So unless you really differentiate, it's kind of difficult to it's, it's not 2015 anymore. You know, there was pros and cons to being on Amazon back then. Now, it's very, very difficult. Yeah, so you're, you mentioned, you're coming out with powders next. What's the 2026 plan?
Morgan Zanotti 20:51
2026 plan is, keep selling a lot of product through Whole Foods and Sprouts. That's like the number one priority grow Amazon as fast as we can. And then we've roll on sheet some innovation. So, yeah, we've got a powder version coming out in a stick pack, and then if maybe one or two more 10 gram skews. And then I've tasted some 20 gram SKUs that I'm loving, so I might launch a 20 gram version, probably online only next, yeah.
Andrew Maff 21:13
I love it. I always found the hardest part with CPG for E commerce, just in general, is especially for beverage space is like, to make the shipping make sense, you usually got to ship like a 12 pack or something. It's pretty difficult to go anything smaller and to get someone to want to try something for the first time, but they got to buy a 12 pack of it is always kind of difficult. So, like, I love the powder idea, like I love anything figuring out that you can do, to do like a sample element so that they could test it. Because you're kind of, you're kind of making retail do the little bit of the education, and then just hoping that they love it so much. So really, the people who shop with you end up only being like evangelists, and it's a whole different world.
Morgan Zanotti 21:54
Interesting. Yeah, we've thought about building out like a three pack of our beverage for, like, someone who just wants to try it, but doesn't want to buy, you know, 36 dollar 12 pack or something
Andrew Maff 22:05
Yeah. I mean, if the logistics of it makes sense, I would totally do it. I think it's lower as a barrier entry. Yeah, that's usually the problem.
Andrew Maff 22:13
Morgan, this was awesome. I don't take up too much of your time. I really appreciate you having the show. I've learned so much. This was awesome. Really appreciate it. I'd love to give you the floor tell everyone where they can find out more about you and more about you and more about Waay.
Morgan Zanotti 22:24
Yeah, for sure, we're drinkway.com, W, A, A, y, you can find us on Instagram and TikTok @drinkwaay, and then I'm at Morgan, Zanotti, Z, A, N, O, T, T, I on Instagram and TikTok.
Andrew Maff 22:32
Love it, Morgan. Thank you so much for being on the show. Everyone who tuned in, thank you as well. Please make sure you do the usual thing, rate, review, subscribe all that fun stuff on whichever podcast platform you prefer, or head over to the ecommshow.com to check out all of our previous episodes until next time see you there. Have a good one!
Narrator 22:51
Thank you for tuning in to the E comm show. Head over to E commshow.com to subscribe on your favorite podcast platform or on the BlueTuskr YouTube channel. The E comm show is brought to you by BlueTusker, a full service digital marketing company specifically for E commerce sellers looking to accelerate their growth. Go to bluetuskr.com now for more information, make sure to tune in next week for another amazing episode of the E comm show!