 All right, welcome to the podcast on today's show. We're talking to Miguel from Somos. Thanks for joining. For people who don't know, what does your company do? Hi, Diego. Thanks a lot for having me. So my name is Miguel Leal. I'm one of the co-founder of Somos Foods, and we make healthy and convenient Mexican food. We want to make Mexican food as approachable and fast, as healthy as possible. And before we get into your company, we've been trying to use this. I said this off airty. We've been trying to use this product Riverside for a long time, and I think they finally figured out a way to make this podcasting so easy for us. And so here we are using Riverside, and quality looks good. I wanted to start with your journey around, specifically around when you were at kind. And so what did you learn? What did you see in the marketplace working under Daniel? And what was your impetus for wanting to launch this brand? What did you see that was missing? Yeah, it's so funny that you ask it that way. I don't think I've ever been asked that question before. But kind was so important for the story of Somos. I would say just learning from kind was the role that a business should take in society. What is the responsibility of living the communities that you operate better than you found them? And that's something it's at the very center of Somos. Somos means we are. So it's about two cultures coming together. I think working with Daniel was also very important for me because kind is so successful. And Daniel is probably one of the most successful, is not the most successful founder in full. And I think what set him apart is that kind was not a three-year venture. It took 24, 25 years to build kind to where it is today. And he always bet on the long term. He never took any shortcuts with culture, with the product, with the relationships, with the retail. And that was something that was very impactful for me, second MBA for me working for him. But more importantly, that's where the idea of Somos came from. We were looking to what would we do next and we were pitching ideas to each other. And one day late at night in the middle of the summer, that's when the idea of Somos came about. I really love that. I mean, I think for, I mean, you could talk about this in some way, but usually when you watch an entrepreneur of that caliber that figures it out, it's like a couple things stick out. It's like the philosophy they have. And then it goes back to like the traction they're trying to achieve. And when you take shortcuts, you get cut short. It's an interesting thing to think about. But I think a lot of entrepreneurs, specifically young entrepreneurs, think, OK, I'm going to become a 100 millionaire in three years. And while certainly that can happen, it's very rare. More often is the chance that someone dedicates seven to 10 years, if not more of their life, to finding that success. Yeah, and I've been doing this for a while, Diego. And I think something that we try to do is we romanticize the early successes. And we discount the people that have put in the work and have been doing it for a while. We just, I think it's a matter of attention. It's much easier to talk, like you said, about the two, three year successes than putting in the time. But what we do in food in particular, it just takes a while. The channels, they take a while to feel you're doubling or triple in sales every year. And that has a lot of challenges with sourcing and with manufacturing. And just adoption for people to try it and repeat the purchase and then to share that and recommend it to other people. I think most of the time it looks like this. That's true. So when you first came to market, what were the first products you came to market with? Yeah, it's interesting. We wanted to make sure there was a product market fit. So we launched chips and salsas in September, I wanna say three years ago, September of 2021. And we had a lot of success. We had a lot of people buy them. I think we estimated sales to be X and it ended up being five X. We were still a little bit at the end of COVID. So people were buying a lot of things direct to consumer. And I also feel like maybe we have just big families, the three of us, the three co-founders. So we had a false read on the market and really push to do these boxes of D2C. And then coming in January, we were all outside, we were not in COVID, retail to cover again. And then we realized that maybe sending boxes of Mexican food that would last for a month was not the variety that people were looking for before the pandemic ended, right? Yeah, that's so funny. And did you get funding before you launched or how did you guys self-fund this? What was that like? Yeah, so the three of us self-funded it. We've been very scrappy when it comes on what we are doing and how we are building this. It's our money that we're putting together, the three of us, Prorada. And when I thought about starting the business, there weren't a lot of Mexicans doing CPG when I started my career. And two of my favorite people were Rodrigo and Daniel. And we started off as friends and we would just connect and share stories and help each other out. And then we started working together at kinds. So it just made sense that we would do it together. And as an added bonus, kind of like at the same time that we were doing Somos or putting the business plan in Somos, Daniel was starting Camino Partners, which really does this. They invest in brands for the long-term leveraging Daniel's team and expertise and capital for sure. So it was, not only doing businesses with friends that I really enjoy, but then also the infrastructure, we were very lucky that that came as a result of that. I wanna ask you a question. So for the listeners who might be thinking about starting their own CPG brand or their own company, what kind of time horizon are you thinking about as you obviously given your experience with kind of a commitment with them today? Just to give people a window into look, here's the game. Here's really, and you might not succeed, but here at least is what you need to prepare for. What would you tell those people? Yeah, so I am in my late 40s and I just where I am in my career and in life, you know, I really wanted to do something different, which was this startup and I wanted to do it for the next 10 years. So we made a commitment to each other and we said, hey, we're gonna give this a go. We need to be, you know, really very true to each other, very making sure that if things are not working out, we say it, but if we hit certain struggles and we have, you know, through the couple of years that we've been on market, that we see this as a 10 year project. You know, it took kind 15 years to really get going and we thought maybe naively so that we could leverage some of the experience from kind and maybe do it in five years less than kind to have this, you know, crushing it then. And now actually I think the opposite. Now that we've been doing it for a while, it takes more time and it takes more money to do it right, but we are at the point that the team is in much better shape this year than it was the year before. Our performance is doing better with relationships with the trade is doing better. Our cash flow profit, you know, looks a lot better than it last year. Why would I exit now? Like now we have a really successful business. I don't lose any sleep at night thinking, hey, what if Somos doesn't make it anymore? So now I might have been pushing, you know, my time in the company actually farther out than I did it before I started. In some way you guys are seasoned. So the second time you go around this, did you ever think about maybe you acquire some companies to get early growth or just, or even now, maybe are you thinking about the stage where you can sort of acquire one plus one equals three? Any rumblings? Yeah, no, I mean, we've looked at both of them, but we always, you know, reach the same decision. You know, we really want Somos to outlive us one day we will not be here and Somos will still be there on the shelves. And the more that we work on it, the more we realize the potential. Like we think there is a 30 billion addressable market that in the next five, 10 years more consumers are gonna cook Mexican food at home just like they do with Italian food. And the more that we do it, the more we realize there is nothing more important that we could be doing than this. And it goes back to the shortcut. Like at the beginning of our journey, we could have merged with another company and get us to profitability faster and, you know, things like that, but every time that that comes up, we always have the same thing. And it is, you know, Somos is gonna be one of the most beautiful things that we do professionally. And it should have all of our attention. I really love that. One of the projects we're working on here, I do real estate development. One of the things we're doing is creating a market called Juntos. And it's the idea of Los Angeles has a lot of Asian influence and a lot of Latin American influences. And so we're partnering up with the Taiwanese chef. And so he draws a lot of inspiration from the Asian cultures. I'm from Peru. And so naturally there's a lot of Latin American cultures. And in the LA there's both. And so we're starting this project that it's a way to sort of introduce the blending of the food, you know, we're calling it Juntos market. And of course we'll have products that we'll sell on the market. But it's really just like a time and I think obviously I can speak to it in LA but it's also a time I think in America in general where to your point, I mean, the addressable market of introducing Latin foods, Mexican products is massive. And there's a massive opportunity there. It seems like that's what you're aligning to which makes a lot of sense. I love it there when I love the name. Like I never thought of Juntos when we were coming up with Somos but all those, you know, community driven words. And I love Juntos so much because it has the hard J on it. Yeah, yeah. Which should at some point collaborate. Juntos and Somos. We can. We can do something for sure. It's gonna be a little, a part of the building is also gonna be for media. And so the idea there is chef is kind of a known person. And so the idea, you know, is like here we are making this dish. And then we sell tickets and people can learn in real time how to cook some of these products. But early days, but we'll see. Have you ever, this is kind of a funny question because Daniel's obviously been a guest shark on Shark Tank but have you ever thought about going on Shark Tank? I don't. Like I feel Shark Tank is great. And for the people that participate is fantastic. But I have Daniel and from all the sharks he would be the one that I would like to have on this business. So I would rather leave that opportunity to someone else, you know. What other products are you guys launching? I know there's a whole line of the plant-based products. I don't think you guys, you phrase it in the right way where I don't think you go vegan, vegan, you know what I mean? But it's a, what products are you guys working on now to expand the line? So, you know, our story, we pivoted a D2C portfolio into retail. So once D2C kind of like didn't give us what we thought it was gonna give us, we went to Expo West 22 months ago, a year and change. And we saw that there was this huge opportunity to innovate in the Mexican set of the store to bringing more mainstream consumers into the Mexican set. And we were very lucky because Rice became our hero product. We launched our Rices, Rices performed really well. And then we follow up with a great innovation which was the Mexican street corn rice which is our number one product today. Number one product, wow, okay. Yeah, and it's performed tremendously well where it is in distribution. It's a top five, top 10 skew in the rice set. And it was really great for us after the bad read that we had in D2C to have, you know, this line of products that just immediately from the get go performed with brands that have been in the market 30, 40 and 50 years. And right now, you know, we launched last year with Whole Foods, our enchilada sauces. And after six months in the market, in many regions of Whole Foods, it's already the number one and the number two skew in that set. So we think, you know, now we have this amazing one two punch. You know, and we are less about promoting products and less about promoting recipes. So think now that you have, you know, some cooking sauces and then a line of rices of all the different recipes that that unlocks, you know, we like to say that we like to market like a Lego set, you know, and now that you have all these new pieces, all the recipes that you can build from that. So that's really, you know, our priority right now. I love that. I mean, it makes so much sense. So basically you start with the recipe first, you start with the thing first, and then you go, not the recipe, but the product first. And then you see how, how many different dishes I guess you can, you can make from that. And so from a marketing perspective, how much like, what do you spend most of your time on? Like what do you attribute the success to? Obviously one part of it is clearly there's demand, but then the other part of it is in educating the consumer or informing the consumer. So how do you guys go about, what do you see? It's hard, but what do you see working in that space? Yeah, and that's exactly right. Like I think what we are doing, we are very good at that no one else is doing. You know, like I see a lot of people that a lot of other companies, the startups that are great at social or that they are great with influencers. With us, what we do kind of like our secret sauce is two things. So we start from the way that we look at trends because of the 68 billion addressable market of Mexican food, 82% is in restaurants. So most Mexican food comes from restaurant. Really only people like me that have a Mexican abuela go and buy groceries. Mexican food is, you know, the food that is presented today on the set requires a lot of ingredients and a lot of time to make tacos, you know, it's not simple. So we look at a lot of data on restaurants. We work with companies that aggregate changes in menus across thousands of restaurants in the US. And that's how we found the Mexican street corn. That was a trend that was happening. We were able to bring it into retail and that became our number one skill. So we are, you know, we work a lot of time looking at that and, you know, we do it ourselves. We buy secondary data. I think there's a lot of richness in those conversations. So for me, that is like the input piece. And then the output, you know, the biggest part of our marketing mix is working with retailers, putting brands together so we can create recipes of, you know, five ingredients, 10 minutes, $15. And we would go, you know, with a mass merchant and partner with certain customers with certain brands there, other manufacturers and create those recipes. So it's a little bit of category management and then there is a lot of shopper marketing that has to happen. And a lot of the beauty is when people have the finished product and they say, I can't believe this only took 10 minutes. I can't believe this food came out of the microwave. That is really the aha moment. There are other people that make Mexican food. There are other people that make pouches but no one is bringing all of it together in partnerships at the store like we do. A ton of people do it on social media but not at the moment of purchase. I mean, that's amazing what you just said there. And so you're aggregating menus to see what the restaurants across the country are trying to bring to the market. Then you're seeing what works and then always partnering with the retailers, the smart move. I don't think people understand that enough. You can't force them to do anything. I mean, you can try, probably not a great idea, but at least they have their own signals of the market of where things are heading. They have their own data set. And so those two paired together output some form of like, I think we should try this. And then you guys go ahead and work. That's amazing. I mean, I wanna tell people that's a bit of a masterclass that you just shared. And I hope people leverage the data, especially now with new tools in AI where those things become a little bit simpler in terms of aggregating and processing information. That's fascinating, really smart. Makes a lot of sense actually. We shared the data with retailers. They share back the point of view on us. And whether you are successful or not successful, you're never gonna bet a thousand. You're always gonna end up with better relationships. And I feel it takes all of us to make this move. The mission of Somos is to take out, take out. That less people are getting food from Mexican restaurants and more people are cooking at home, learning more about the ingredients, learning more about the culture. We have to meet them halfway and do simpler recipes. And you are not gonna do it by yourselves. It would be impossible for a brand of Somos to take it out. But the opportunity to close that gap is 30 billion of the 70 billion. That's the under index that retailers have. So if you go out and reach out to other brands and then you also work together with retailers between all of us, we can get it done faster. And it's like the tide that raises all boats, right? That's fascinating. I mean, it's exciting just to hear you talk about it. Cause I mean, the way you're approaching this is, it's a lot of chess. It's beautiful in that way. I mean, it's very methodical, very thoughtful. It speaks to the brand. The Somos name is a beautiful thing where it's like we're all together in this. We are partnering with retailers. That's really cool. What do you think is next? What do you think is next for the company? I mean, obviously you have success right now with the corn, the rice. Where do you wanna take it? What's the innovation that you see percolating? Yeah, I mean, I think we just need to get better. So we are on year two. So when we look at our execution, we have two, a couple of retailers where we've just done a really good job with these partnerships and they are big. I would say, maybe it's about a thousand stores between both of them that we are executing this the way that we wanted to do. So a lot of it is just, establishing relationships, showing the data on how much we're growing the category, how much we are bringing the mainstream consumer into the Mexican set. That is really our objective that we wanna do. We want more people to fell in love with Mexican culture through food, okay? And execute better this partnership. As you know, with Chopper marketing, it is not something that you can execute nationally. Every retailer has their own loyalty card data or some people really like to do coupons on some others like to do bogus. And you really have to tailor made, one of our partners in a Midwest chain is not as big in the natural channel. So we have to look to other partners there. So there is still a lot of meat on the bone in terms of activating these partnerships. I would like also to maybe get better and faster on the data side and start seeing a lot of those trends. You know, like you mentioned AI, we played a lot with AI. We actually have a, you know, if you go to abuela.ai, we have a Mexican grandma that teaches you recipes and you can tell her what you have in the fridge and she would come up with a recipe for you. And we would like to start aggregating a lot more of that data and maybe bring some technology to the shelves that we've been playing with for next year. So those are really the places where I think we could be doing a much better job. And yeah, I think, you know, like from where we started in the podcast, I think this is a 10, 15 year journey. And if we just get a little bit better every quarter of this execution, it really adds up over time. I love the abuela.ai. I'm gonna check that out. So you go on, it's a website. That's so cool. It's actually modeled after my mom, like my biological mother. So we did a 360 scan of her for a whole day and it's in the way that she talks. So it has a little bit of a Mexican item. We had her record. I don't remember how many thousands of words. And yeah, you know, you have to be a little bit playful with these things, right? That's a lot of fun. I wanna ask you a sort of a high level question. So I remember speaking, I went to an event one day and one of the secretaries that was working with Obama, specifically tailored to Mexican American relations was there. And he was giving us a window into how many, like how America, how dependent we actually are on Mexico in terms of, just in terms of importing. Here you are. And I don't know, obviously, between the three of you, you have your success. Is this an initiative? Can it be an initiative for the country? Cause it's a lot bigger than that, right? It's relationships. It's our closest neighbor. It's import. Is there a broader discussion here that's almost as thinking about in just in terms of American Mexican relationships? Yeah, I mean, we started the company where there was a lot of heat on immigration. And I don't think, you know, that has completely gone away, but I don't remember the exact number, but I remember just Daniel, Rodrigo and I talking about how much more Mexican food was more popular than Mexicans or Mexican culture. So here you have the number one ethnic food in the country. You know, during COVID, Mexican food surpassed Italian food to become the number one ethnic food. Yet, you know, there was all this, you know, pushback. And you know, we are the three of us, you know, very, you know, I came to this country to study, you know, this country gave me a scholarship, gave me opportunities, gave me education. I met my wife, who's American. I became a US citizen 12 years ago. Like I am in a lot of ways, very much in debt to this country, but you know, I do feel that there is a lot of room to become better in that relationship. And we, it's not gonna be done with Somos. It's very much like what we're trying to do. It's gonna take like a lot of people to do it, but I do want Somos going back to the question you asked in the beginning, what did I learn from kind? I would like Somos to play a small role in that. 70, 80% of all the dollars that come to Somos are spent either with Mexican or Latin communities, either in Mexico or in the US. And it's this just like beautiful cycle of Mexican chefs producing these great food so people in this country can enjoy it and can save money and can learn more about Mexico. And then some of those dollars go back and get invested in that community. And that's really back to the ethos of Somos on the reason we started the company. I think that is, you know, if we can execute that, then it was worth our time to do this. I wanna ask you this question because we've had Hector from Tia Lupita on the podcast after his Shark Tank debut. You guys are expanding the market together in some way, playing nice in the sandbox. Have you ever think about making an acquisition there? I mean, it seems... With Hector, I've asked him many times, he doesn't wanna sell. No, Hector is both one of my closest friends. I mean, we grew up together. I was his son, little league coach for three or four years. So we worked together at Diamond Foods, like the two of us are from Monterrey. He's both, you know, one of my closest friends, but also an inspiration. I saw what he did, you know, with the company. He became an entrepreneur three or four years before I did. When he did his rounds of friends and family, my wife and I, you know, invested with him because we believe on what he was doing. So, you know, very much. Well, I think we actually, the way that we are doing advancing this together, and it's not only Hector, you know, we are now organizing dinners with Latin founders. We had 60 of them in the first dinner. We organized in New York. We're doing another one in March in LA. And I think there is a lot of room to do more, to be more supportive of each other through the whole ecosystem, not only the brand owners, but, you know, mentors and investment like Daniel and Camino partners and, you know, bankers and suppliers and the whole supply chain, you know, we should be, you know, I think working more closely together. Add me to that list. I do some angel investing myself. That'd be great to be there. Where can people find you? Where can people shop, buy the product, tell everyone where they can enjoy the deliciousness? Yeah, so I'm always worried about this question because I don't like leaving anybody outside. But, you know, Meyer, HEV, Sprout, Whole Foods, Albertsons, Safeway, Target, Walmart and Publix next month. And yeah, and hope to continue to grow that list with Expo West coming up the second week of March. So if you're in LA and if you can come and see us, we'll be having some, serving some amazing tacos at the show. Miguel, thank you for coming on the podcast and sharing the story. Really inspiring. And I hope our listeners take a lot of key. I mean, you dropped a lot of good bombs here. A lot of good pro tips. And I think I hope the next CPG founder sort of starts on second base or third base based on what you've shared today. Thank you, brother. Thank you, Diego, for having me and for your support of Somos. Thank you for tuning in. If you enjoyed this episode, share with your friends, your family or anyone you might think might benefit from the conversation we've had today. And if you haven't already, please take a moment to leave a review on your favorite podcast platform. We'd greatly appreciate it. Your feedback helps us improve and reach more people who can benefit from our discussions. The best way to stay connected with us and get the latest updates on future episodes is through our social media channels. You can find us at Startup and Storefront. We'll be back next Tuesday with another great episode. See you then.