 Welcome to Start Up The Storefront, presented by Aurobora. All right, welcome to the podcast on today's show. We're talking to David from Modigo Brands. Thanks for coming on. Freebo don't know. What does your company do? Well, we're a brand development company. We're primarily focused on Latin brands. We're interested not only in authentic Latin origin, but also pay attention to sustainability, healthier products. But really, you know, this is kind of an opportunity to say there are other great Hispanic foods other than Tex-Mex. Very true. It's Hispanic Heritage Month, so that's fitting. Kind of nice. Good timing. Thanks for being here. What made you want to go into the brand development company or the business, I guess? Well, our company has been in export management for about 25 years. And in that business, we've represented some really great food and beverage companies. We used to work with Jose Cuervo with their chilula hot sauce, until it sold in McCormick's for some ungodly amount. And then we worked with Grupo Modelo in Asia, represented them in Japan, for example. Took it to the number one imported beer. We're working with Novamex, which is Haritos and other brands. So we've been in the Hispanic sector for many years. And I've learned about this amazing crossover potential for Hispanic food and beverage products, both in the Hispanic sector, both retail and food service, but also crossover to a wide variety of restaurants and stores. What are some of the things that I guess you learned early on that if people are listening and they have a CPG company and they're like maybe emerging or trying to go into new markets, what would you say the thing that you took away? For example, as you say it, to me saying, OK, taking Modelo and going to Asia. Now, maybe today that sounds straightforward, but maybe at the time, that sounds unbelievably crazy. And so what goes into that? Well, that's definitely a hard business, starting from ground zero. And Corona, while it was a great beer here. Now, of course, Modelo is the number one beer in America. But at the time, Corona wasn't very strong in Asia, for example. So we kind of had to start ground zero and promote the concept of Corona as a vacation beer, a holiday beer. And the Japanese really took on to that after a while. OK. So it's a lot of brand development and then strategy around what are people really, what are they connecting it to, which I guess when I think about Corona, it's sort of like the palm tree, the beach. OK. And so at some point you go, all right, I've seen this happen enough times. I think I have a playbook or a game plan. Let me go ahead and try to roll the rock. Exactly. OK. And then what was the first thing that you went with? Well, we started Chantico agave a few years ago. And I noticed that we're only several agaves in the market. And to be honest with you, without naming names, they kind of look like shampoo bottles. And so my goal was to create something that was colorful and bright, proudly imported from Mexico, a Hispanic product. Again, a lot like Cholula in the hot sauce category that you could put on the table in a restaurant. You can use it in the kitchen. You can use it in the bar. And it goes in all kinds of retail settings. OK. So the agave number one. Agave number one. OK. And then when you start working with the brand, what is known or is like all of it off? So no logo, no branding, nothing. Now we start from ground zero. I really focused that design on the bottle, for example, and on the powder. We're also the first people in America with a Chantico powder. The idea behind it was the piña. That design is a piña, which is the heart or the pineapple of the agave plant. So obviously if you take that and you take it for a number of months, it becomes agave. Agave becomes tequila. But we take it before it's fermented and turn it into a really delicious light sweetener that's been around for 10,000 years. And let's say with this specific product. So there's a sweetener that's been used for a while. But now you're introducing it to, let's say, the American market. That's right. And so today you can say, people kind of put agave in their coffees. We see that enough. But I would say five years ago, I'd never saw that. Or maybe 10 years ago, I for sure didn't see that. And so how much consumer education is happening while you're talking to these retailers around like, hey, look. This is a thing and people use it? A lot. Because obviously people are used to traditional sweeteners, some artificial sweeteners, and some of the other sweeteners like Stevia, which has an unusual taste, I think. What's so great about this product is the taste. It's the lowest GI. It's vegan, unlike honey. It's got a really good price point. It's water soluble. So it works in cold or hot beverages. So that's what we love about it. It's really an all-around sweetener. And sweeteners, as you know, like salt, sweeteners go in everything. A lot of our trouble is to try and define usage because the usage is anywhere that sugar or honey would go. What have some of the best marketing examples of success that you've found? Is it television? Is it social media? In all your experience, what's the thing that really connects with people and I guess gives brands the biggest bang for their buck? Well, it's definitely broadcast like this. Getting the message out to folks. Social media has changed. It's a little bit more difficult now than during COVID. What do you say that? It's crowded and it's hard to really stand up. I mean, we have a lot of creative people on our team that are constantly looking for ways to disrupt and become noticed. But it is harder now for a small brand unless you have somebody famous touting it. Really, it's a lot more difficult. Do you guys ever work on something like that? Maybe getting on some celebrities or just some, maybe use some chefs, some influential people in the food space. Exactly, without naming any names, I just met at a show, Subur in Colorado. Just this last weekend, we talked with a chef who's half Mexican, half English and he cooked for the Queen of England for a number of years. And he's very interested in using Chantico Gave in a lot of his recipes. Does the Queen of England like tacos? I don't think she does. What is the Queen of England eating? Well, I don't know why they brought him on, but obviously he provides a diverse option for the Royal Family. And he's a fascinating guy. And we're working with several other chefs, one in Colorado, one regional. And one, I won't mention her name, is on NPR National Public Radio. And we're meeting with her. So the idea is to start through our chefs, teach people how to use a Gave in some really creative ways. Okay, so let's pretend there's an entrepreneur listening to this. They have something that they make in-house. They like it, call it a Tabasco, call it their own barbecue sauce. Great, let's say you meet them and then you go, okay, here's what we do. So you take the idea and then you have a company of human beings at your location. A part of that company is dedicated to marketing it. Another part of it is probably producing it at scale, co-packing. And so how much does it take for a brand to actually not so much get on a shelf, but more so be ready to say hi, consumer. What is, how long does that take? How much money's involved in that? What does that look like? That's a good question. I think it's part magic and part practical, right? So it takes, I think something unique that might be a family story or geographical story that you can put into a format that is interesting to people. For example, for ours, we use a ketzel bird, which has a bird of a long history in Mexico as being a very important symbol of Mexico. Chantico is the Aztec goddess of home and hearth. There's a lot of thought behind who did. So put a lot of thought into the brand and the story. In terms of the practical stuff, that's not my side as much. I'm more the, let's say the creator, but the people that I work with are really good at dealing with shelf life, pricing, packaging, the ability to produce it consistently and effectively and get it to the retail shelf or the food service restaurant in an effective way. If you can't do that, it doesn't matter how beautiful the package is. Sure, sure. And then when it comes to the marketing side of it, what happens then? Well, you kind of build it with what you're doing. So we have a broker network in the West United States. So they oftentimes tell us, this is what this retailer is gonna require. So for example, we're in United supermarkets in Texas. They came to us and said, okay, first to get in, you have to do a fill, a free fill and then pay a fee. And then you're working with distributors like Khe and UNFI and they also charge you. So you have to create a really smart and a gross profit margin so that as you make sure at the end, you have a good net profit margin, which is your profit. Yeah, you mean like slotting fees? Slotting fees, yep. I never understood those. I still don't. It's just a permission to get on their shelf. I know, I don't really do anything for you. It's kind of wild. Right, but it is kind of, if you will, then there's all kinds of, there's different kinds of marketing, as you know. There's field marketing, which we're using hang tags and things right on the product. Like we used a hang tag on Monserro de Hia barbecue salsa, which was, if you don't like it, five times your money back. Oh, wow. Right, and we put that on there. We only had five people out of thousands that took that up five times your money back. What is barbecue salsa? Explain it to, is it, is it that literal or is it? It is that literal, exactly. It's barbecue salsa. We played the game with sauce because people don't know salsa is just Spanish for sauce. So it is a barbecue salsa. In other words, it's great on carnitas and all kinds of meats, chicken, pork, but it's also a full service. Like you can do dipping with the, for example, our New Mexican barbecue salsa is made with hatch green chili. It's really delicious, nice, sweet. Our Sonoran product has chiltip and peppers and that's a little spicier. So, you know, it goes on all kinds of meats and dips and marinades. Yeah, and then with the coffee, you're in the coffee business. One of my favorite things to tell me about this Avenida's coffee. I love Avenida's coffee. I've been working with our partner in Guatemala for 15 years. He's our distributor down there. They're a large farming group. Guatemala is a beautiful country. It's really sustainable the way they built the farms. And there's nine different roast areas like Antigua or Hueyue to Nango. So we're focusing on Guatemala and coffee to start. Some are bolder, some are light. Chilero blend is our blend. With the idea that if you can see on the package, it says it's basically direct source. And that means most people supply their coffee from a bunch of brokers. Those brokers add on money. Coffee's not as fresh. Our packaging facility is in Guatemala City. So we can package it fresh, get it to you quicker and get it to you cheaper. How many different food products do you have under your umbrella? Just these three. Okay, and then are you stopping at these three, focusing on these three or are there more in the works? Well, you know, I would say there's a Latin brand factory in my head. I've got a lot more ideas, but you know, we have to focus as much. Again, even three products is a challenge, but I wanted to present them as a group with this idea of, like I said, innovative, healthier, sustainable products. And then capital. So right now you're doing a capital raise. Let's hear a little bit about that. Yeah, we're doing a capital raise on Start Engine, Orogo brands. And what is Start Engine? People who have never heard of that. Start Engine is a crowd funding platform where people can go if they wanna invest anywhere from $250 to upwards of, you know, whatever they choose. And it's an opportunity for us to create a group of people that we can work with as our partners, as opposed to straight equity funding. Okay, what is the investor getting in return? They get a part of the company and shares. And our goal is within at some point in time to have a monetizing event for the product, acquisition or larger investment from a company so we can scale up nationally. Yeah, and right now you're raising how much? Our goal is to raise 1.23 million. And you said you were about halfway there. We're at about almost 400,000 now. Okay, and how are you getting the word out about the raise, obviously like this, but another, how do people go ahead and like find this ability to just invest in your brand and your company? Well, there's three ways. There's our community, which is my Tio's, Tio's, you know, all my extended family lead investors that we know from our manufacturers. There's the SE Start Engine investors. The Start Engine has a large group of investors that are on the website that are looking for cool products. So they invest and then there's the public. And so I'm going out to the public meeting as many people as I can, people who are interested in Hispanic products. But I think people that are just interested in Hispanic products in terms of the opportunity for profit and the opportunity for acquisition. Yeah, it's big. We had Tia Lupita on, obviously Hector, he's been on Shark Tank. Any thoughts on going on Shark Tank? Any desire to get on there? I have somebody on my team that was on Shark Tank and for another product. And I'd absolutely love to do it. Kind of, to be honest with you, the Start Engine raise is kind of like that because I'm presenting quite often, but I'd have no problem going on there and sharing my ideas because I think, I think they'd be interested. You should apply. Yeah. We've had enough experience on that. It seems like, I mean, at a minimum, it seems from what we've been told, usually brands make like $200,000 on their website within a week of the airing. Okay. And so that's pretty significant. Obviously some make more, some make less, but it seems like the average is 200,000, but the exposure is almost certain. And we hear from people who are in CPG that their products fly off the shelves almost immediately from airing, which says a lot, you know? It says like, it's one thing to just, someone goes to the website, orders it from their house, but it's another thing when people drive to a grocery store, find your product in a sea of aisles and then boom. Well, and I love the idea that it also points out some ideas to make the product line better. And that's important for you because when you're a creator of a product line, you believe in it with your whole art. We just spoke to, No, she was the company and he was making food paint. And so simple stuff. So it was like organic, I guess blended things, but that kids can write on like their pancakes and stuff and they can eat it. And so when I asked him like, what was the biggest challenge that he was having from a marketing perspective that he thought Shark Tank would have been it, he said, nobody understood the product. If you see it in the grocery store, it's not clear from a parent's perspective that a kid can take it out this tube right on their food and then eat it. It's also not clear that they're not gonna take out any other tube that looks like that and right on the walls. And so he saw Shark Tank as nothing more than an opportunity of like finally educating the consumer on what it actually is in a visual setting. And I was like, that's really interesting, right? He wasn't looking at it from like a Shark Tank TV perspective. He was just looking at it like biggest bang for my buck educating consumer. That's smart. And it was like, it was interesting to get that perspective. The first time I got that perspective. Yeah, it makes sense because you were just talking about barbecue salsa. What does that mean? And agave isn't as well known as I would like, especially the fact that with growing diabetes in this country, it's the lowest GI sweetener. And you can use last because you use two thirds of agave instead of a teaspoon of honey. One thing you mentioned before around partnering with your retailers, I think that's another sort of pro tip that CPG companies, some that have come on this podcast understand where it's like instead of trying to solve a problem and force the problem into the retailers, they'll start the conversation with the retailer and be like, what do you think is missing? What are you seeing as an opportunity? How much time do you spend? Or what can you tell us about any insights in that world, specifically to like the Hispanic products and how they're being viewed by these retailers today? Hispanic products are still kind of confusing for a lot of retailers. Does it sit in the Hispanic or even a lot of people would call it a Mexican food shelf as opposed to a broader Latin group? Like the International Isle or something? International Island area, the Hispanic area. And what we're saying about our products, for example, is they go in both. You know, obviously our gave goes anywhere, pancake syrup would go or honey would go or sweetener. I mean, it also goes in a Hispanic set. Same thing with barbecue salsa. That can sit right next to Heinz and whatnot and compete but it also can be in a Hispanic section. So we're actually doing a show this week in Texas, Cocina Sabrosa, which is just Hispanic food products with the idea and a lot of the big retailers like H-E-B are gonna come there so we can share Hispanic products and how they might be differentiated from traditional products. So there's really no, they don't know yet. They're still playing. They're struggling with it because I think America is struggling with what it means to be Hispanic because there's still some questions about it. You know, are you Mexican? Are you Venezuelan? Are you Cubano? Who are you? My family is Hispanic. We're from New Mexico. We've been there for 400 years. Nobody knows about us. You know, we're a small group of Hispanics. So, you know, it's hard to explain just like Asians. There's so many different kinds of people from Asia so there's not one group of Hispanics. So people tend to go, it's easy for them and that's the phrase is Mexican. So that's not a criticism, but that's just what we're knowledgeable about. Yeah, being from Peru, I mean, I don't think I've ever seen a Peruvian, and very rarely would you see a Peruvian product in something that wasn't the international section if you found it at all, frankly. You'd have to go to a special bodega or something and like here in LA, there's a bunch of them. But if you don't know, you know, it's certainly not, it's a homegrown bodega. It's not a big retailer. And Peru has a lot of amazing indigenous agriculture, you know, and so yeah, we're kind of losing sight of the broader and that's what's so exciting is that along with French and Japanese that Hispanic foods to me are this amazing cultural opportunity for all of us to learn about different Hispanic cultures. And even within Mexico, as you know, because I know you've traveled there and Southern Mexico, Zihuataneo and those areas, all kinds of amazing culinary things that you don't see in a Taco Bell or a Tex-Mex restaurant here in the States. That's very true, yeah. And I guess people's first introduction to that usually is a restaurant. So first they have it, they have it a couple of times, like Molle or something, then you fall in love with it and you're like, how can I make that? How do I buy that? And now you're all of a sudden looking for it maybe in a grocery store or just trying to make it yourself. And if you go to Mexico City, I mean, you know, it's got some of the most beautiful, amazing cuisines and restaurants in the world in my opinion. A lot of the restaurants are top restaurants in the world. When it comes just to go back to the brand stuff that we're talking about, when it comes to, I guess when you look at it high level from a market perspective, macro perspective, how long does it take for a CPG company in this space to be acquired? Is there a number? Like usually we see seven years to 10 years in the tech space. Is it similar in the CPG space? Is it longer? Is it more of just a revenue play? Obviously probably all of it. But what have you seen? What exits have you seen? What gets you excited about doing this and sort of you're at the end of the day, you're light at the end of the tunnel? Well, I think it's definitely possible within five to seven years, you know, historically it's been longer. But large companies, you know, large food and beverage companies are acquiring these brands, not just Hispanic brands, because it's hard for them to develop new innovative products. So they're kind of on the hunt for a lot of different CPG food and beverage products a lot quicker in their development. But you definitely have to have a proof of concept for sure. Yeah, and what is usually that number? Is there like a inflection point whether it's number of stores? It's usually sales. And I would say probably the first inflection point for a second stage investment might be in the four to five million dollar range. And a lot of investors that are interested there. And then beyond that, you know, really 20 to 30 million. Where are you guys today in terms of, let's talk about locations. Where can people buy you guys? Well, they can buy us on a lot of stores. You know, we're obviously focused in Denver. We're in a lot of stores in the Midwest. We're just getting into the Pacific Northwest in California. We've just gotten a broker here. And we got set up in Kahi warehouses here in California, Northern and Southern. We're in Texas and a number of supermarkets like United. And Publix came to us from the Southeast interested in our products. So we're looking to do a project with them starting in December, January. And what is the most surprising state to you? Where you're like, man, these people from Indiana love my barbecue salsa. Well, I think it's interesting because we are focusing on the West because there's a kind of a connection. I think the South, you know, it's interesting. There are a lot of Hispanics in the South. A number of Hispanics are there for agricultural reasons. So there is a familiarity. The Hispanic food is a little different down there. But you know, people are really open to trying new things. And if you think about it, young people, early adopters, they're very similar, whether they're from Birmingham or Denver or LA. They're all online and they're looking for cool stuff. And that's what I think we are. So let's talk about the younger generation that is on TikTok. Are you guys on TikTok? What's, how do you attract them? TikTok, yeah, is just disruption, you know. I've actually been using my daughter on TikTok. She's 12 and she's a chef. So she's been using our products and she's really cute. Her name's Jane. That's awesome. You know, again, TikTok, you know, we're doing a lot of work on investment right now too. Now, generally that's an older demographic. So you're using more Facebook orientation there, let's say. But definitely Instagram and TikTok are more directed towards young folks. Strange enough, I've relearned about LinkedIn. Okay, tell us what you've seen there. Huge social networking for business people, investors, used to be, you know, it was for getting a job many years ago. So what I always looked at it, and now it's a really, it's a way to connect with, as I said, investors and, you know, a lot of crowdfunding resources. Yeah, I'll give people a real life view into this. So when we were doing the Bendy Boy, we did a brewery. And when they were raising capital for their operations, they really didn't know any investors, frankly, when they started this whole thing. And so at some point, I was like, how are you guys getting these meetings? Because we're doing, it was during COVID. And so we ended up doing a lot of these like virtual meetings, but to an investor group. And we did like a 10 of them, maybe. I was like, how are you guys getting all these investors? And they're like, if the title of this person on LinkedIn says investor, they have a DM from me, and then I'm just following up, following up, following up. That's exactly right. And it works. Yeah. That's the thing that shocked me. You just have to go after me. You gotta stick with it, though. Yeah. First time they ignore you, second time they ignore you, et cetera, et cetera. A lot of times. I have like 60 unread messages in my LinkedIn. Yeah, exactly. And I barely look at it. Yeah, it's too much. Yeah, so you get to seven or eight. And again, you still have to still jump out of the crowd for them to even open it. And a lot of them aren't right for you right this time, but that doesn't mean because when you're an entrepreneur, you're constantly looking for investment. Even after this crowdfunding is over, we're gonna start working on second stage investors. So we're gonna keep all these contact information and then keep working at it as we go. You never stop. No, it never stops, especially in CPG. You're at the seed level now. Yeah, I'm trying. You're raising your seed and then you'll start your A probably next year. About 18 months, probably. Okay. How much will your, well, I guess we'll find out in terms of how much that, what your evaluation will be and how much you decide to raise. Yeah, it all depends. It's the bottom line of how much you're selling, where they can show a profit because people are interested in social responsibility. They're interested in health, but they're also interested in the bottom line. Yeah, I guess personally for me, everything's moving to like the better for you thing category and I think Latin food in some weird way usher is that in kind of nicely. Oh yeah. Right, when it comes to like tortillas or like the deal of pita doing the cactus chips. You know, it's like little things like that that are just so simple, I guess, simple in nature where it's not, you don't have to explain it to somebody 15,000 times for them to go, oh, I get it now. Exactly. I mean, there's so many great agricultural products from Latin America that aren't even in our market except as ingredients. So, you know, I'm excited. I was telling you about Chantico. We actually use agave in our barbecue salsa and, you know, everything, we don't have any preservatives. We're non-GMO, non-gluten-free. I mean, we pay attention to everything. And on the social responsibility side, our company about 10 years ago teamed up with Trees for the Future, which is I think the number one tree planting organization in the country because they have an 80% success rate on planting trees. And so, we also have carbon-neutral shipments. And again, both for our international and our domestic US shipments. And to me, that's a big thing. Yeah. All right, let's do this. Let's go through each thing you have on the table for people listening and tell them, one, the name of it, and then two, what to eat it with. They're how to consume it. Obviously, the coffee one's obvious. I think people know that one. But let's start with the barbecue salsa. Barbecue salsa depends on which one you want. The product from Sonora, which is the pink color. Chiltepe and pepper is like saffron. It's very light, delicious pepper. Very expensive, but we found a way to access it. And it's for people who like a little spice. So, you know, I would say this is gonna be more chicken or steak on the grill or anything that you like where you want more spice. Now, the green color is the New Mexican. Again, it's hatch green chile. It's a little sweeter. That's gonna go really well with pork. And our third variety from Honduras is gonna be more fish-oriented. And we're gonna have, it's gonna be a culantro versus a cilantro. What is a culantro? Culantro is just a variety of cilantro. It's just C-U-L-A-N-T-R-O. And then also peoncillo, which is a natural sweetener for that one. And there's a shantico raw, which is the darker one. And that's for people who really want less processed foods. So raw is cooked at a lower temperature. You know, it works like the lighter agave. It's got a little bit stronger taste, but it's people that like raw food. Okay, interesting. The powder is delicious. The agave powder. Agave powder, shantico agave powder. It's blue agave. We work with the largest producer of agave in Mexico. Quality control is top of the line. And we created an agglomerated powder that nobody else has, so it doesn't stick together. So it'll, you know, you open up a sachet, you use it just like any other sweetener, except it's lower GI, as I said. And then the wild is actually picked from the open fields in Mexico, in Guadalajara. And it's a much lighter taste. I think people like it. Some people like honey, but sometimes you want a lighter taste. And we've kind of joked around about starting a Save the Bees campaign. Because first of all, it's plant-based and it's also vegan, which is super important for people. That's actually a pretty good idea. You say you joked around about it, but the Save the Bees campaign might be a really good idea. I'm on it, man. I'm on it. On TikTok or Instagram. Right. And our new one, which you were coming out with next month, is hot agave. And hot agave, as I told you, is made with a chili dada pole. It's primarily one of its great uses people are using on as pizza. So I think, you know, there's just all these innovative ways to use. As you said, these Latin foods in different ways. That's, I can't wait to try it. See the Diavolo pizza. Yeah. It's got a little hot chili. Exactly. Hot honey. But instead of using an Italian spice, you use a Latin spice. That's a great idea. Get a savory sweet. Tell people where they can support you, where they can find you, where they can invest, if they're interested in doing that. Well, I think some of the best ways, just wherever you are, is to, for example, buy us on Amazon. All these products are on Amazon. We're also in Fair, which is similar to Amazon, but services more of the specialty market and specialty products. We're actually in What Chefs Want, which is a national food service distribution company that has 16,000 locations. So they're serving all these restaurants, so you're using us and you may not know. Yeah. You know, and we're really focusing on local Denver food service and retail to build up the brand. And then moving into these stores, some of the retail stores that I mentioned. David C. Snarros, thanks for coming on the podcast, brother. Thank you for having me, I appreciate it. Thank you so much for the support and making it to the end of the episode. If you haven't already, please leave a review and share the episode with your friends. If you never want to miss a beat on all things entrepreneurship, make sure to follow us on socials or daily content. See you next Tuesday for another great episode.