How do you also differentiate yourself when you are a common household good? On this 167th episode of the E-Comm Show, Andrew Maff interviews Blake Shook, CEO of Desert Creek Honey. Despite facing competition from larger honey brands, Desert Creek Honey has been able to differentiate itself through its unique production process and commitment to education.
In this episode you'll see why Desert Creek Honey stands out as a truly unique brand, offering a comprehensive presence across every part of the supply chain, from producing their honey as a manufacturer to acting as a supplier for businesses and individuals. If you want to stand out in a crowded market and learn from one of the leading figures in the honey industry, this episode is not to be missed.
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Andrew Maff and Blake Shook
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Blake Shook
Blake started his beekeeping journey 20 years ago at 12 years old as a small scale hobby beekeeper. Over the past 2 decades, the business has grown significantly with the help of an incredible team. It is now a commercial beekeeping operation with over 30,000 hives, a bulk bee supply company (Desert Creek Bulk Bees) , a honey packing company (Desert Creek Honey), a chain of hobby beekeeping stores (The Bee Supply) and a commercial bee supply store (Commercial Bee Supply) and a pollination company (Desert Creek Pollination). Blake has two incredible daughters who make sure he doesn’t spend too long working bees every day. He also serves on the National Honey Board and on the boards of the American Beekeeping Federation & American Honey Producers.
00:03
So we have really unique things about our product, but the big thing we try to do is focus on vertical integration. We're one of the only companies doing and telling the story behind the product. Hello everyone. Hello everyone. And welcome to another episode of The E-Comm Show as usual. I am your host, Andrew math, and today I'm joined by the amazing Blake Shook who is the CEO over at Desert Creek Honey. Blake, how you doing, buddy? You ready for
01:19
a good show? Wonderful. Andrew, thanks for the invite. Glad to be here. Yeah, I am so
01:23
excited to have you on the show. So I always, I always have, like, my little notes. And you have so much going on that I actually, I'm gonna have to read this. So you've got, obviously, desert Creek honey. You also have a bulk be Supply Company, which is desert Creek bulk bees. You have a honey Packing Company called Desert Creek honey, of course, a chain of hobby beekeeping stores, the bee supply and a commercial bee supply store, commercial bee supply and a pollination company, which is desert Creek pollination. How are you taking the time to do this podcast right now? Like, God man,
02:01
five minutes late, so
02:04
shocked you did this at all. So tell me, like, I always start this off relatively stereotypically, which means I'm sure we're gonna get all the insight from you. So why don't you tell me a little bit about your background, how you got started with this, and just tell me. Tell me all that. Yeah,
02:20
my pleasure. Well, you know, it was a happy accident. I mean, I the origin story is, I always loved entrepreneurship. I loved the outdoors. I loved, you know, anything entrepreneurship, even from, you know, I was eight years old, writing business plans. And when I was about 12, I had really gotten into, I'd really gotten into chicken farming, of all things. As a kid, got in the country, convinced my parents I was going to build this farm to table egg chicken egg company in their backyard. And so stores lined up to carry our egg products. And I convinced them, I'm going to do this in your backyard. And I think they believed me. And so they were like, we've got to get this kid on anything else other than this, because that's the last thing we want our backyard. So at 12, they signed me up for sports and all sorts of other hobbies activities, trying to divert my interest. And one of the things they signed me up for was a beekeeping scholarship, where this, you know, 3% of beekeepers are under 40 years old, so it's a dying industry, right? So this club was trying to get kids involved. They signed me up, and I won it. I won a free beehive class. Totally fell in love with beekeeping. Absolutely fell in love. It's just a fascinating hobby. So got one beehive, got two beehives, got 10 beehives, started going to local grocery stores. We were one of the first food products on Amazon, and all of a sudden realized halfway through high school, maybe I could make a living with this, and really started building a business. And so started scaling it, and by the time I graduated high school, moved into it full time, had a full time business. We were in several grocery stores, and never really looked back. Started diversifying. About 10 years ago, really started diversifying, and all those other businesses got on a reality TV show, and that kind of helped build our brand, but sales for later in the show.
04:29
Beautiful, that is, that's nuts. So one of the things I wanted to, I know I wanted to ask about, obviously, since I brought up the 15 different elements of the business, tell me a little bit about the different elements here, because it's not, obviously, it's not just honey. It's also a pollination and it's bee supply, and then the hobby side, like there's a ton of different stuff. So tell me a little about each of those entities. Yeah, you know, the simplest
04:54
way to summarize it is that we're, we're the only company in our industry that. Really can, can that really does everything. So we're 100% vertically integrated, so we kind of took that to an extreme. You know, not only do we produce honey, package it and sell it to grocery stores, we also produce the wooden wear that the beehives the bees live in. We produce the wooden where we sell it to other people. We supply ourselves. We we raise our own honey bees and sell honey bees to other people. We pollinate crops. We produce honey. We take that honey all the way to the to the consumer through E commerce, directly, and then through brick and mortar stores, you know, indirectly and so. So really, any aspect of honey, the beekeeping industry, we have a company that does that. And so there's really nothing that we don't do and don't touch within, within this industry,
05:55
owning the entire kind of like supply chain and customer life cycle like that is just unheard of. So what kind of gave you the idea to not only do that, but what also, like, what's going on in your head? Because that just sounds like so much like, No, I don't know any other brand that's just like, oh, we should also be the manufacturer and the supplier. And like, what? What was that process? Like, it's
06:22
a good question. So I think my team asks that all the time, what on earth? But it's really, yeah, there's a couple elements. And one is a love for entrepreneurism and entrepreneurship, and I think that it's a bit of an addiction. Anyone that's an entrepreneur knows that it's pretty ridiculous, but so I think that's an element of it, but I think that it's a relatively small industry that I'm playing in and and so, you know, it's a, you know, couple billion dollar industry. It's not $100 billion industry. And so it's, it's within reach to own the supply chain and to really try to be a significant force within that industry in one generation, you know, that's within reach. And so I think that was part of the attraction is, you know, this is an aging industry. This is an industry that hasn't been shaken up in a long time. Lots of industries and food categories like that out there, for sure. And so we really see an opening to come in, shake it up and take our fair, maybe unfair size of the market in a very short period of time.
07:34
Wow. Tell me about the honey in itself, like it's and I mean this in the nicest way, and I always try to caveat this what I'm talking I'm talking to brands, like, it's honey, right? Like differentiating yourself is is very difficult. So how did you manage to get it into a position where you're doing as well as you are? Yeah, Andrew,
07:54
that's such a great question, because it is a commodity, and it's like trying to sell a tomato, right? A tomato, yeah, tomato, you know. And how do you set that part? And we honey is tricky, because it borders the line of just a straight commodity, but then maybe, like a sauce or a spread, you know, it's, it's adjacent to those, but at the end of the day, you know, there are some things we can do, like how we process it as special. It preserves more than nutrients in most honey. The locale is special. It's not imported from other countries. You know, the US consumes 600 million pounds of honey a year. The US only produces 120 million pounds a year. So the vast majority of honey consumed is imported. We don't do that so, we have really unique things about our product, but the big thing we try to do is focus on that vertical integration that we're one of the only companies doing, and telling the story behind the product. And that's something that, for example, private label grocers can't do, you know, they can't put a face on the label, they can't tell a story. They can't tell that origin story. They can't give you a behind the scenes. Look at, here's how we do this, you know. Let's just, let's, you know, open up the curtain. Look behind the curtain at, here's how we process it. Here's how we raise the honey bees. Here's, you know, here's Joe from production and what he did today. So that's kind of been our niche is education, and then giving an insider look at how everything's done,
09:27
from the just the I know, there's so many different elements to the business, between, like, you know, like we talked about the hobby side and the corner side and all that stuff, but from the honey in itself, what is your top sales channel? Is it retail, or is it some level of E commerce
09:42
in in profit or in revenue,
09:45
that's always the best follow up question, yeah, you pick,
09:49
yeah, in, you know, it's hard to beat the revenue of some of the big E commerce players, you know. I mean, they're just such volume drivers. And. And we're there because our customers expect us to be. But as you know, probably far better than I do, it is tough to make a profit on E commerce with a low margin item like food, especially one that's heavy. You know, our product is heavy, and that is tough. So lots of revenue. You know, Amazon and walmart.com are certainly the mammoths that we play. Our best profit driver is brick and mortar. You know, the Walmarts, the HEBs of the world, are hard to beat from a profit, yeah,
10:36
from an E commerce perspective, it being the revenue driver, but not exactly the profit margin makes sense. What's the CPG side? I know is always a struggle, right? Because even if it's a commodity, even if it's not, it's could be wildly differentiated. It's still one of those things where the big hurdle is getting someone to try it, right, and then once they try it, and then they understand the story, it's a little bit easier to kind of keep them coming back. Not as challenging on a retail side, because sometimes you can have, like, samples and things like that, but you can't really do that on E commerce. So what's your approach in kind of getting over that hurdle?
11:12
Yeah, it's a great question. And we've, we've pretty much tried it all, and you know, our most successful attempts have really been, you know, running running sales, getting Buy Box and making sure our reviews are fantastic, and then doing targeted ad spend. And we've, we've tried everything over the years to make that cost efficient and and there's some tools that we're have come onto the market last few years that have been helpful, but, but it's a constant. It's a constant battle of getting people to try it, building that brand loyalty when you can't hand them a sample. So, so we've we've found you've got to have a fantastic profile that catches them the first time. You've got to have all the talking points that they want to see. You've got to have that hook. You got to have great images. And then we really talk about what we're shifting more and more to, talking about the taste, where a lot of our competitors don't do that, so we're trying to, that's one of our strategies. Don't tell anybody for shifting into 2025. Is really digging into the taste and describing that, but, but, yeah, I mean, it's, it's, it's hard to beat the ads, ultimately, especially if you're talking on, on an Amazon I mean, you, you've got to, oh,
12:44
yeah, is from an E commerce perspective, obviously you mentioned Amazon being one of the mammoths. What about your own site? How much do you kind of focus on getting as much revenue as you can through that channel?
12:55
Yeah, so, so a fair amount, actually. I mean, it's been a great I mean, we get lots of great data from from our website and the customers there, but we have a little more of an opportunity to tell our story, to build that brand loyalty, to to help those customers connect with us, and then we can reach back out to them in a more direct way. And so we do try pretty hard. We find a lot of people will buy on our website, and then eventually we'll transition to one of the other e commerce players, which which were really, you know, which is okay, but that that website is often their first introduction. And so we do a lot of Google ads and the various things to drive people to our website. And so, yeah, we focus on it quite a bit. Again, not a huge revenue driver, but a great introduction to us as a company, and a great way to build brand loyalty.
13:50
Yeah, yeah, I find that the kind of omni channel element for CPG always comes into play, where you could be spending an arm and a leg driving traffic to your website, and then maybe you acquire them, great, but then they tend to hop over to Amazon eventually, or something like that. Although I will say we do often hear the opposite, right? Like I find Amazon's a great customer acquisition channel, but then after a while, you've got to find a way to get them back to the site. So you're actually seeing them do the opposite, where they're starting your site and then going Amazon. We
14:24
do see that in to be fair, we do see it both ways. If someone's frustrated by elements of other e commerce players, yeah, then they'll come to us for a more white glove customer service experience. So we certainly do see that, but we see it the other way too. People try it on our website, they like it, but then they like the convenience of the other e commerce players just it's just so easy to buy it and and I do think, you know, price point as is a factor there. And you know, we find customers that find us first on our website and then go. Go, Oh, I didn't realize you were on Amazon or walmart.com, or Kroger's marketplace. I get there, I buy their stuff anyway, so I'll just start buying it there, so that we do see it both ways. And we're not a specialty product, we're more of an everyday item. How
15:18
do you decipher like a marketing budget knowing that there's that kind of bleed over, like, yeah, to your point, I know there's a bunch of different platforms now where you can kind of judge attribution, but they're not integrating with, you know, Amazon or someone going to Walmart or someone going to retail. So how do you decipher your marketing budget when you have that much of a bleed over to not only other e commerce stores, but brick and mortar as well.
15:41
It's really hard, and you know it, I've asked that same question of executives of all scales of companies in the food industry, and I've always shocked at the responses of that's a good question. We're just gonna pick a number, you know, this is what we can fit into our budget, and it's really hard. And you know, how effective is your E commerce advertising? What's your ROI on it? And we have some tools now that are helping answer that. But my goodness, I mean, some of the biggest food companies in the world, you know, I've asked their piece of marketing, E, commerce, marketing, how are you doing this? And it's like, good question, yeah, so my answer is, you know, we, we try to look at it holistically. We look at as a company, what results are we trying to drive this year, you know? And, and, you know, are we, are we trying to what growth rate are we looking for on our E commerce channels, or growth rate are we looking for on our brick and mortar channels? We tend to start with brick and mortar first. So if we want to achieve these growth goals of brick and mortar, what dollars do we need to support that growth? And then we start there, because that's where most of our profit is. And then with what remains of our budget, we say, okay, how can we most effectively spread that out amongst all e commerce players to drive the greatest results? And then it's all about just optimize, optimize, optimize a B, testing a B, testing a B, testing until we find that point of diminishing return, because it's always there and so so we're pretty quick to experiment, and we'll, we know, we'll throw $10,000 at something to see where we hit that way of diminished return, so that it more accurately shows us that the type, The dollar amount we should be spending on certain paints.
17:44
So in your scenario, that makes a ton of sense. But there's also other elements to this, right? So like, let's take kind of your standard E commerce company. They're tracking everything in there, on like, a couple channels, great, easy enough. Everything is easily trackable. Then you start to diversify. You're doing more omni channel elements. Now you've got to kind of do that finessing, like you're talking about, where you're looking at, how do I come up with, you know, a marketing budget, etc, when I can't track everything, your scenario, you also own the entire kind of chain. So right? Do you look at them as individual companies, or do you look at it all as one holistic kind of life cycle, in which case, like, you know, for example, if let's say the packing company was doing really well, or the pollination company was doing really well, do you kind of recalculate those profits back into a different part of the business, or do you keep them kind of more siloed? Yeah,
18:40
it's a really good question. So, you know, they're becoming more and more of one company. I mean, typically profits roll up to the parent company, and then, you know, then we decide where to push those profits back down, where do we want to invest more or less, and what business unit do we want to reinvest those dollars? So, yeah, it is looking at it pretty holistically. You know, some business units are more cash cows, but the growth ceiling is low, and so we're going to probably reinvest a little less. There others, we feel like maybe they're not generating much revenue or much of a profit. Retail food brands a great example. But we, but we feel like there's an incredibly high ceiling. And so that's where we'll we would invest more of those profits. So, yeah, it's more of a holistic look. So,
19:26
so interesting, because most brands don't have that benefit, right? Like they don't have they don't have the control of the what their cogs are. You control your own cogs, and then you work it back up, which puts you in such a great position, and then you also have these kind of additional arms of like, you know, hobbyists, and basically, like the fulfillment side and all of that that becomes very interesting, which means that you must be nothing short of a genius to be able to manage some
19:56
of that stuff. Well, I have people working for me that are team, well, exactly. But
19:59
20:28
question. So we have a big plan still on the beak. In the beekeeping world, we've got really big plans, but most of your listeners are, you know, e commerce focused, and then food brand focused. So I assume so on that front, you know, we feel like there is still an incredible market opportunity for really growing our food retail brand, so that we feel like we've just scratched the surface there, and we are very interested in branching into honey adjacent products. Honey has an incredible health halo, as we call it. You know, it's perceived as a very healthy sweetener, and it's better for you than, you know, sugar, and it's better for you than other sweeteners. And so, you know, when you when you get into honey, adjacent products where honey is kind of the key ingredient, or the star, there's, there's a big demand there, and and there's a lot of momentum there as well. And so we're leveraging our customer base that trusts us and knows our history and trust our product into other other products that are, that are. We're calling them honey adjacent. And so, yeah, we see a lot of potential there, and we think the market is still very ripe for simple ingredient lists, for products that are easy to understand, that, have you know, completely transparent processing and ingredient and so. So, yeah, we have pretty big plans there on E commerce and brick and mortar. On e commerce, we are really, for the first time, crafting product specifically for E commerce, where this is a product that will live on E commerce. So the packaging, the weight, the dimensions, the price point, is all designed to win on E commerce. Probably wouldn't work at all in brick and mortar, but we feel like that's the winning game plan for E commerce, you know, not taking a three pound jug of hunting and try to win on, you know, shipping that thing across the country that's just not going to win. Unfortunate, yeah. But a four ounce tube of, you know, propolis face cream for $49 that's a winning product, you know,
22:42
yeah, very interesting, and it makes a ton of sense, right? It's very similar to adjusting your marketing based on your audience. You're also adjusting your product line based on the audience you're targeting Exactly. So awesome. Blake, this was awesome. I really appreciate all your time. I know you are wildly busy with all the different stuff you have going on, so I really appreciate it. I would love to give the opportunity let everyone know they can find out more about you, and, of course, more about desert honey, absolutely.
23:10
I mean, the best thing to do is check out our websites. If you go to desertcreekhoney.com if you're interested in getting into beekeeping, you go to the beesupply.com and we'd love to help get you started and or you can check us out on our YouTube channels or any social media channels. Love it. Blake,
23:28
thank you so much for being on the show. Obviously, everyone that tuned in. Thank you as well. Please make sure you do the usual rate review, subscribe all that fun stuff on whichever podcast platform you prefer, or head over to theecommshow.com to check out all of our previous episodes. But as usual, thank you all for joining us, and we'll see you all next time.
23:44
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