Late July Snacks: Nicole Bernard Dawes. Crackers and Cookies were Failing… Tortilla Chips Saved Them

Nicole Bernard Dawes spent much of her childhood hanging out in her dad’s potato chip factory on Cape Cod. She liked his kettle-cooked chips a lot more than the flavorless snacks in her mom’s health food store. But when she started her own business, she wanted the best of both worlds: a snack made with natural, organic ingredients…that still tasted good. Nicole launched Late July Snacks in 2003, when most consumers barely knew what “organic” meant. For years, sales limped along. Then, in a moment of crisis, she made a company-saving pivot by launching a brand new product – organic tortilla chips. Within just a few years, Late July grew to over $100M in sales, and Nicole decided to launch a new brand in an even more challenging category: soda. You Will Learn: How growing up in a family business can help–and hurt–when you launch your ownThe pros and cons of financial vs. strategic investorsWhen to cut a product that isn’t workingWhy the fine print in a contract is so importantHow the hardest decision might be the best one for your family and the business Timestamps: 07:22 - The car crash that launched a potato chip company 21:00 - Pregnant and craving crackers: The birth of Late July Snacks 36:54 - The organic cookies that tasted great but nearly sunk the business 40:49 - Tragedy and crisis: a father’s death and a $3 million loan in default 50:31 - A tortilla chip Hail Mary 57:29 - Nicole’s first big sales call… and her last chance to save the company 1:08:49 - “The big fish eats the small fish.” A food giant acquisition 1:13:36 - Nicole launches a new brand, moving from a hard category–to an even harder one This episode was researched and produced by Chris Maccini with music composed by Ramtin Arablouei. It was edited by Neva Grant. Our engineer was Robert Rodriguez. Follow How I Built This: Instagram → @howibuiltthis https://www.instagram.com/howibuiltthis/ X → @HowIBuiltThis https://x.com/howibuiltthis Facebook → How I Built This https://www.facebook.com/howibuiltthis Follow Guy Raz: Instagram → @guy.raz https://www.instagram.com/guy.raz/ Youtube →guy_raz https://www.youtube.com/channel/UCNSfrxNEmCruNtjIzxCBHjg X → @guyraz https://x.com/guyraz Substack →https://urldefense.com/v3/__http:/guyraz.substack.com__;!! Iwwt! RZoD751oWzUzoqqdJiqaoL6HdJfRHDUO1TKvYJ424d3Udn7-Pw9Nj6nEsauh9zcgEvLjUEc$guyraz.substack.com http://guyraz.substack.com/ Website →https://urldefense.com/v3/__http:/guyraz.substack.com__;!! Iwwt! RZoD751oWzUzoqqdJiqaoL6HdJfRHDUO1TKvYJ424d3Udn7-Pw9Nj6nEsauh9zcgEvLjUEc$guyraz.com http://guyraz.com/ See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Guy Raz?

  Our presenting sponsor today is Anthropic, the team behind Claude. Every founder on this show started with a hard question, not the marketing plan, the 2:00 AM kind. Is this idea any good? Am I the one to build it? Should I quit my job? Anthropic got built the same way, a public benefit corporation founded on one hard question. How do we make sure AI goes well for people? So they asked over 100,000 people their hopes and their fears and are publishing what they find, even the uncomfortable parts. Me? I've got my own hard question about AI.

• 0:40Guy Raz?

  Here it is. If everyone has access to something that can help them write the business plan, build the prototype, analyze the market, maybe even come up with the idea, what separates the people who actually build something from everyone else? I don't have a clean answer yet, so I've been sitting with it with Claude. There's hope in hard questions. Ask yours at claude.ai/hibt. We get support from US Bank, a question I love asking founders. What's the one decision you almost didn't make, the one that changed everything? Because it's never the obvious stuff. It's never, I decided to start a company.

• 1:21Guy Raz?

  It's the small, boring, Tuesday afternoon decision you barely remember making until you realize it's the reason everything after it either worked or didn't. Say you're 18 months in, business is growing, you've got expenses coming from six directions, gas for the van, office supplies, your phone bill, team lunches that are actually client meetings, and you're putting it all on whatever card you grabbed in year one. You're not thinking about it. Why would you? You've got bigger problems. But here's the thing. Path A, you keep going like that. End of the year, you're sorting through statements, trying to figure out what went where. You've left hundreds, maybe thousands on the table in rewards you never earned,

• 2:04Guy Raz?

  money that could have gone back into the business. Path B, you pause and get the US Bank Triple Cash Rewards Visa Business Card. Now you're earning 3% cash back on gas and EV charging, office supply stores, cell phone service, and restaurants. You pick up an extra $750 cash back as a bonus. And you've got a low APR on purchases and balance transfers for 12 months while you're scaling. Same business, same expenses, two completely different outcomes based on one small decision. Visit usbank.com/business to learn more.

• 2:45Guy Raz?

  The creditor and issuer of this card is US Bank National Association pursuant to a license from Visa USA, Inc. Some restrictions apply. If you travel often, you'll want to hear about this unprecedented offer. For the first time ever, new Delta Sky Miles Reserve American Express Card members can earn two Delta Comfort round trip flights for travel within the 48 contiguous US states, Puerto Rico, or the US Virgin Islands. Plus, you can earn 50,000 bonus miles towards your next getaway. And who doesn't appreciate an elevated airport experience? Delta Sky Miles Reserve Card members get access to the Delta Sky Club,

• 3:27Guy Raz?

  your pre-flight oasis to recharge with 15 visits and four one-time guest passes each medallion year when flying Delta together. That's up to $950 in annual value. Value estimate based on $50 per visit rate to purchase additional visits or bring a guest to the Delta Sky Club. Make every trip feel more rewarding with the card that upgrades your travel. Apply today at delta.com/cardsocial. Offer ends November 4, 2026. Minimum spending requirements and terms apply. Flights are fulfilled as flight certificates valid for Delta Comfort or Delta Main to select domestic destinations. Book 21-plus days in advance.

• 4:09Guy Raz?

  Up to $80 per person and taxes and fees apply. Other restrictions apply.

• 4:23Speaker 01

  So we debuted the company in 2003 at the Natural Products Expo in Baltimore. And we basically left that show a national brand.

• 4:33Guy Raz?

  Okay, all right.

• 4:35Speaker 01

  So basically, we got all these great orders, but we also got a lot of customers that were, they were really excited about the idea, but organic maybe hadn't taken off in their chain yet, and their customers didn't really know what it was. So we got a lot of big orders from stores that probably shouldn't have given us big orders. And about two months after that show, our sales just disappeared completely.

• 5:07Guy Raz?

  Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 5:18Guy Raz?

  I'm Guy Raz, and on the show today, how a family potato chip company gave rise to a brand new family business, Late July, a brand of organic snacks that struggled for years until it found its hero product.

• 5:38Guy Raz?

  There's something that happens when you build your business around a highly specific type of product. Most founders passionately believe in it, and naturally, they spend years trying to make it work. But sometimes, maybe more than sometimes, it just sputters along. This is what happened to Nicole Bernard-Doz. Her dad, Steve, founded Cape Cod Potato Chips back in the early 1980s. It started as a tiny storefront in Hyannis on Cape Cod, and over time, it became a huge success. So when Nicole decided to start her own snack company as an adult, her dad helped her get it off the ground. The company was called Late July,

• 6:18Guy Raz?

  and Nicole focused on making organic snacks, mainly crackers and then sandwich cookies. But the business struggled to really grow. And then, just as the financial crisis of 2008 started to hit, Nicole's dad died. Just weeks later, the bank called in a $3 million loan. Suddenly, Late July was in real trouble. Actually, it was technically in default, and Nicole needed to figure out a way to save the company fast. And the idea she came up with was pretty simple, and it was the last best chance the company had to survive. That one idea didn't just save Late July,

• 6:58Guy Raz?

  it completely transformed the business, which was later acquired by Campbell's. After that, Nicole would go on to start another company, this time in flavored sparkling water and soda, a brand called Nixie, which we'll hear about a little later. As for Nicole, she grew up, where else, on Cape Cod, in the beach town of Chatham. Her mom ran a small health food store there, but it was her dad who first had the idea to start experimenting with snack foods.

• 7:28Speaker 01

  My dad loved food. Like, he loved to cook. And, you know, I think he was feeling like this natural food store, like, conceptually, he liked the idea, but he didn't really understand why there couldn't be just a natural potato chip in there. Like, why wasn't that a thing?

• 7:45Guy Raz?

  Yeah.

• 7:46Speaker 01

  But what motivated him was he had read an article about this in Parade Magazine. I don't know if you remember.

• 7:54Guy Raz?

  Sure. It was in the Sunday supplement of the newspapers, yeah.

• 7:57Speaker 01

  And there was an article about this, like, old-fashioned way that this place in Hawaii that was making potato chips and tourists were coming in and buying them. And, you know, my dad sort of put two and two together, and he thought, well, we live in a tourist place. And, I mean, how hard could that be to make potato chips? And I'm going to do that. And he rented a small storefront. And my mom still had her health food store totally separately. And then my dad started this storefront, which was in Hyannis at the time.

• 8:26Guy Raz?

  And he was only selling potato chips in this little storefront?

• 8:29Speaker 01

  Correct.

• 8:29Guy Raz?

  Okay.

• 8:30Speaker 01

  His brother had been making, like, fried dough at fairs, so he had, like, the ability to, like, fry things. And, I mean, he learned a lot really fast about how not to cook potato chips. But, long story short, started this company. But what happened initially was it did not work. I mean, it was, I would say, a pretty big failure.

• 8:53Guy Raz?

  It's hard to make super starchy chips crispy unless you...

• 8:56Speaker 01

  Well, no, the chips tasted excellent. Just no one knew they existed. I don't think he really thought, like, is this the absolute best location for tourists to place this business? You know, there was a few other factors that maybe weren't fully fleshed out, and the first year, it almost went out of business. But unfortunately, a car came through the front of the business. The man has a heart attack. He drives his car through the front. It was a glass front. Glass goes everywhere. The car stopped just short of the counter, which is where I was sitting on the ground, like, drawing. And basically, what happened was that this car going through the front of the business got the potato chip company on the front of the newspaper.

• 9:35Guy Raz?

  Hey, earned media, right there.

• 9:37Speaker 01

  Right. And at the same time, the insurance money from the fact that the business was destroyed, basically, was just enough to propel the company through the winter on Cape Cod and make it to that next summer season. And by that point, people had heard about the business, and it kind of just took off.

• 9:56Guy Raz?

  Wow. So this unfortunate, weird, just like freak accident turned out to be something that really helped sustain the business. So, all right, so he starts this kettle-cooked chip company. And I probably imagine when people tried them in 1980, 81, 82, they were like, wow, this is different than a Lay's potato chip or whatever was around, you know, Ruffles. Like, this is really crunchy and really different. It tastes like something I might get at the county fair.

• 10:26Speaker 01

  Well, they're different because they're cooked completely differently. Like a Lay's cook is a continuous cooked chip, which

• 10:32Guy Raz?

  Right.

• 10:32Speaker 01

  I mean, versus a kettle cooked chip.

• 10:34Guy Raz?

  It's like on a conveyor belt, right?

• 10:35Speaker 01

  Yes. And so just the whole way it's cooked, just every, I mean, just it's a completely different type of experience when you eat a Lay's chip versus a Cape Cod chip. And so, you know, I saw this as possible. And I honestly saw that my dad did this with effectively nothing. You know, he didn't come from a big, long line of people who knew how to do this. You know, he just got an idea and then he did it. So I think, you know, I mean, it was obviously something that as a kid, I was very frustrated that in my mom's store, there wasn't more products. Like, I didn't understand why other people weren't, why, why would you make a product that tasted that bad? Like, I just couldn't, couldn't connect the dots on it.

• 11:15Guy Raz?

  It's interesting that you mentioned that your dad, like, your mom had this grocery store. And I remember, you know, the eighties, if you went to a food co-op, like, if you went to what is now the equivalent of Whole Foods in the eighties, it was carob chips and spelt flour. It wasn't, you know, it was like still very alternative kind of foods. And so this was around the time where that transition started to change, where people were saying, well, hang on, you know, could we just take the delicious things that we like and just make them slightly better, you know, like use better oil and like organic potatoes and make them in smaller batches, right? I mean, that, that was what was happening.

• 11:54Speaker 01

  I mean, that is what has driven me for my entire career.

• 11:59Speaker 01

  People always ask, you know, you had a mom with a health food store, a dad, a potato company, you know, how did that help shape you? And, I mean, it's very clear to me that it, 100% helped shape my perception of what type of products needed to be brought into the world. Because I would go to my friends' houses for dinner or for sleepovers and they would have certain types of cookies or cereal or crackers or snacks. And it was nothing like what we would have in our house.

• 12:27Guy Raz?

  Right. And they were delicious because they're filled with sugar and chemicals and all those things.

• 12:32Speaker 01

  Correct. And they were delicious.

• 12:34Guy Raz?

  Cap'n Crunch and they had like Oreos and Twinkies. Meantime, you're eating carob-covered rice cakes.

• 12:41Speaker 01

  Correct.

• 12:41Guy Raz?

  Yeah.

• 12:42Speaker 01

  And obviously because I saw what my dad did, you know, I knew it was possible. You know, I knew that this was something, so it was like, to me, it was like businesses were making a choice to make these bad tasting products.

• 12:53Guy Raz?

  Yeah.

• 12:56Guy Raz?

  Your dad sells the company in 1985 to Anheuser-Busch. Tell me what you know about that. I mean, five years in, was it an offer he couldn't refuse? I mean, how big did Cape Cod Chips get, you know, in five years?

• 13:11Speaker 01

  Not very big. I mean, it was, it was still just basically New England. And I think what was really happening was, you know, initially he wasn't interested. But after several attempts of getting him to sort of come around to the idea, eventually he decided it was probably the right thing for the brand.

• 13:31Guy Raz?

  So he sells in 1985?

• 13:32Speaker 01

  Yes.

• 13:33Guy Raz?

  And was, I mean, was that like a windfall? Does that mean like he was set for life at that point?

• 13:38Speaker 01

  No. I mean, it was a windfall in that completely different from anything he'd ever experienced in his whole life. And obviously for our family, it made an enormous difference for us because prior to that, you know, running a small natural food store, none of these were really a get-rich-quick scheme. They were a get-rich-really-slow, if at all, scheme. So, you know, I think the idea that he wouldn't have to worry, he could take care of his, you know, that we would be okay, was highly compelling.

• 14:10Guy Raz?

  Yeah. Okay, so now he is working for Anheuser-Busch.

• 14:14Speaker 01

  Correct.

• 14:14Guy Raz?

  And, you know, you are growing up in, on the Cape. And I guess you go to college, you go to Tulane.

• 14:22Speaker 01

  Yep.

• 14:22Guy Raz?

  So completely different world, New Orleans. And, and when you graduate from Tulane, it coincided, this is 1995, I guess it coincides with a, an opportunity your dad has to buy Cape Cod back from Anheuser-Busch. What was going on? Did they kind of neglect the brand? I mean, did they just kind of let it die? I mean, what was the story that you know?

• 14:47Speaker 01

  So they, they actually, Cape Cod Chips was doing extremely well. What happened was they were going to divest their whole snack division and my dad got the opportunity to buy it back. And I, I remember I was in the car with my dad and my now husband and we were driving somewhere and he gets this call and it was sort of like, are we going to do this?

• 15:13Guy Raz?

  Yeah. I mean, it must have been a lot of, I mean, I imagine he had to find investors to help him because now the price was going to be higher than what he sold it for.

• 15:20Speaker 01

  No, it was actually much lower.

• 15:21Guy Raz?

  It was lower?

• 15:22Speaker 01

  Yes.

• 15:23Guy Raz?

  That's amazing. So he actually could buy it for less than what they paid him for it?

• 15:28Speaker 01

  But the challenge was that basically by the time he was buying it back, they would have lost all of their distribution and essentially all of their manufacturing.

• 15:37Guy Raz?

  So he was really just buying the brand name?

• 15:39Speaker 01

  Yes.

• 15:40Guy Raz?

  Okay, so you join this new venture, right? Basically, he, he finds the money to buy it back. And, I mean, do you remember how much it was? Like, was it, was it in the?

• 15:52Speaker 01

  I mean, I want, it was under $3 million. I don't remember exactly.

• 15:55Guy Raz?

  Under $3 million?

• 15:56Speaker 01

  Yeah.

• 15:56Guy Raz?

  That's incredible. He was able to buy the brand. Okay, so 1996, buys a brand and you join him. And there's going to be a lot of work because you've got to find, what, a manufacturing facility or what?

• 16:12Speaker 01

  We just reopened the manufacturing facility on the Cape. And so it had, it had been closed as part of this closure, but we were able to like get all the employees back and reopen it. And that was actually very exciting.

• 16:25Guy Raz?

  Can I ask a practical question here? I mean, making this, it was in Chatham or was it in Hyannis?

• 16:31Speaker 01

  Hyannis, yeah.

• 16:32Guy Raz?

  And Hyannis is, it's probably the closest sort of larger town, like as you get into the Cape, I think, right? But it's still, like, for trucks to go there and then to drive out of there and drive all over New England, like, from just a practical standpoint, it's not very practical, right? Like, what was the advantage of putting it, the factory in Hyannis, which was, you know, you had to drive into the Cape and then all these trucks had to drive out?

• 16:57Speaker 01

  There was no advantage.

• 16:58Guy Raz?

  Okay. All right. Just joking.

• 17:01Speaker 01

  No, there was nothing. I mean, I think the only thing practical about it was that it was reasonably close to where my dad lived. You know, I mean, there was nothing practical about it.

• 17:09Guy Raz?

  Yeah.

• 17:10Speaker 01

  I mean, the only thing that was practical about it maybe was that we had a factory tour. And at the time, you know, when we reopened it and redid the factory tour, I mean, we were the second largest tourist attraction on the Cape after the National Seashore.

• 17:22Guy Raz?

  Okay, so it was like Ben and Jerry's, kind of like going to Ben and Jerry's? Okay, that makes, I mean, that makes sense, but still, like, you joined, and by the way, what was, what was your sort of official title when you joined?

• 17:32Speaker 01

  I was, I ran the marketing department.

• 17:33Guy Raz?

  Okay.

• 17:34Speaker 01

  But I did innovation, too.

• 17:36Guy Raz?

  Nicole, I'm curious, when you, so, you know, you guys start to build the team back together. It costs $3 million to buy it back, which is, it sounds like a lot to some people, but in the grand scheme of things, it's nothing. I mean, it's like a fire sale. But still, he had to, you had to finance production, you had to finance the business. So how did you guys do that? Did you, did you have to take loans out? Did you have to find investors right away?

• 18:00Speaker 01

  Yeah, he brought in investors to, to purchase it back. And honestly, that was one of the things, that was a really like early lesson to me, was, I mean, I don't think I ever fully recovered as a child from the first time he sold the company because, you know, that was very disappointing for me when I was 12. Like, I, I saw Cape Cod Chips more like a sibling than I did a company. I mean, I grew up in that factory. Like, I knew how to operate like a pallet jack probably before I could ride a bike. You know, I mean, I spent so many hours sorting chips and, you know, just being there. And when he sold it, I was like devastated. And when he bought it back and I got the chance to go back and work there again, I was just very, very excited. And I had all these ideas and just going back to my background with my mom's natural

• 18:45Speaker 01

  food store, I was very into the idea of organic potato chips and trying to use organic potatoes and creating even cleaner ingredients and, you know, really just bringing as much of that focus into the brand as I could. And, you know, I think part of what I didn't fully realize at the time was that the investors that he brought in were not really thinking long-term. They had a very short-term window on what they wanted as a return from the business. But I did get the chance to develop what would become still one of their bestsellers today, which is the reduced-fat potato chip. And it was a very exciting project to work on. I was extremely proud of it.

• 19:26Speaker 01

  It launched and almost immediately did really well, which is very, you know, just, I mean, I learned so much from doing that from start to finish.

• 19:36Guy Raz?

  All right. So your dad buys the brand back in 1996 with, with investors. You were helping to run it. But then he actually sells it again, just a few years later, to a snack brand called Lance. And I think that amount's like, like $30 million. So a pretty great return on that $3 million that he raised.

• 20:00Guy Raz?

  But I guess for you, it meant something different.

• 20:04Speaker 01

  Yes. I was devastated for the second time about, you know, the loss of Cape Cod Chips in my life. You know, but it was such a good lesson for me. And I also realized that, you know, my dad and I were obviously at vastly different points in our career.

• 20:19Guy Raz?

  Yeah.

• 20:19Speaker 01

  And, you know, my dad wanted to retire. He was ready to, to live that life. I was just starting my career, so I was very excited about the idea of running Cape Cod Chips for the rest of my life.

• 20:31Guy Raz?

  How old was your dad around that time, 1999?

• 20:33Speaker 01

  Probably like around 50.

• 20:34Guy Raz?

  Oh, so he was a young guy?

• 20:36Speaker 01

  Yeah, yeah.

• 20:37Guy Raz?

  So he didn't want to, he, he was like, you know, I'm good. This is fun. Now I can do other things.

• 20:45Speaker 01

  Yeah. And I, and I think that, me on the other hand, I would say the one thing that was really interesting timing about this whole thing was I was just about to get married. I do highly recommend that you sell a company right before you plan a wedding because it does make it a one hell of a party. But, you know, it was just like, I was starting this new phase of my life where I was ready to roll up my sleeves and work as hard as possible. And I stayed on a transition. And then I, you know, started working on what would eventually become Late July Snacks.

• 21:16Guy Raz?

  You knew you wanted to start your own company?

• 21:18Speaker 01

  Yes.

• 21:18Guy Raz?

  You didn't want to go work for somebody else? You were like, I'm going to figure out my own, and it was going to be in food, in snacks?

• 21:24Speaker 01

  I knew it was going to be, you know, a, like a food, consumable, let me put it that way. But there was a brief moment where I was contemplating doing something for dogs.

• 21:34Guy Raz?

  Oh.

• 21:35Speaker 01

  But I just didn't feel like it could be like authentic to me because I didn't feel like if I could eat the product, I don't know that I could sell it. So.

• 21:44Speaker 01

  Then it morphed into to like a snack mix company. I actually was renting space at this like shared kitchen in on Broom Street in New York City, and I was working on this experimental like organic snack mix.

• 21:58Guy Raz?

  That's a cool idea. I mean, it's it's been done now, but that was a cool idea.

• 22:02Speaker 01

  Yeah, it hadn't been done yet.

• 22:04Guy Raz?

  Had not been done then, no.

• 22:05Speaker 01

  No.

• 22:05Guy Raz?

  Like like a Chex Mix, but like

• 22:07Speaker 01

  Yes.

• 22:08Guy Raz?

  Organic, yeah.

• 22:08Speaker 01

  And so it was delicious. I remember I had these cute, I was calling it the Mulberry Snack Company. I had these really cute little bags. And I brought them to show my dad. And he was like, that's never gonna work.

• 22:24Guy Raz?

  He didn't think that Chex Mix thing would work.

• 22:27Speaker 01

  He's he's like, your cost of these products, you're gonna have to sell it for so much money. It's gonna be such a special D item. You're never gonna be able to mass produce it. You're gonna have all these problems.

• 22:36Guy Raz?

  I don't know why, though, because you would just source all those things from different manufacturers and just mix some Worcestershire sauce and, you know, a couple of spices and you're good to go.

• 22:45Speaker 01

  Oh, that was what I thought, too. But, you know, I was getting a lot of negative feedback. But in the process of working on it, I was now pregnant with my son. And I was going to the my local health food store in New York City, which is called Integral Yoga, and it was on 13th Street. And I also did my prenatal yoga there. And it was like, kind of an old school, reminded me a lot of my mom's health food store. And I noticed something really interesting one of the trips when I was in there. And that is that as much as the perimeter of the store had sort of changed, like there was beautiful produce, the dairy items were now organic and different and interesting. But if when you went into the center of the store, I mean, it could have been my mom's 1970s store.

• 23:30Speaker 01

  I mean, the like, the snack section was just equally as depressing as it was when I was a kid. And I was pregnant, so I just really wanted some crackers. And I went to the cracker section and it was like, you almost had to like, take a time machine into the section of the store. And I thought, that's a huge category in the conventional world. And, you know, nobody really seems to care about it in the in the natural food world. And I thought, maybe this is my opportunity.

• 24:01Guy Raz?

  Crackers?

• 24:02Speaker 01

  Yeah. So, I mean, I think it was a combination of being pregnant, really wanting crackers, you know, not finding any.

• 24:11Guy Raz?

  I mean, it really, and not to sort of downplay the brilliance of entrepreneurs at this time, but like, in a sense, it was like shooting fish in a barrel. Like, there were so many products that had not yet been made organic yet, or or good, right? There were just, there was a lot of opportunities in many different food categories.

• 24:31Speaker 01

  Well, I think what else happened right then, which I think is very important to mention, is that at this exact same time that I was doing this, the Organic Food Production Act passed. And with that, the USDA Organic Seal was born. And then, all of a sudden, now, if you're not following these rules and regulations, it's a federal crime. When other food companies put nutrition facts or do their ingredients, there's nothing really that regulates that. I mean, there's, there's truth in advertising and that type of thing, but there's no rules around.

• 25:07Guy Raz?

  Right.

• 25:08Speaker 01

  You know, how you do that with organic now, you had this very strict set of rules in this brand new seal that debuted. So Late July launched with the USDA Organic Seal. And I, I mean, I think we were one of the first brands, if not the first brand, to have the entire brand launched that way. Like, we never existed without it.

• 25:27Guy Raz?

  And it was a cracker company. That's what it was.

• 25:30Speaker 01

  Correct, yeah.

• 25:30Guy Raz?

  And late, you call it Late July because that's when the harvest begins for wheat? Like, what, tell me what this, the name?

• 25:37Speaker 01

  Well, I think we could go back to the beginning of growing up on Cape Cod. And Late July is that perfect moment in time, you know, you're knee deep in summer.

• 25:45Guy Raz?

  Tomatoes and corn are starting to just come out and, right?

• 25:49Speaker 01

  And, you know, you're, you're, you're, you're in the throes of summer vacation. You're not even thinking about going back to school. You're spending extra time with family and friends. The weekends are even more special. I mean, just everything about that time of year, to me, I will say, full disclosure, my birthday is July 30th, so there's a chance that also has a reason I like that time of year. But I, you know, it's just, to me, it's that magical, special time of year.

• 26:13Guy Raz?

  Okay, so you launch now, and by the way, before we get into how you launched, I mean, how did you finance this business? You wanted to make crackers, an organic cracker? And what, how did you get the cash to to start it?

• 26:28Speaker 01

  Well, I, I had a small amount of money from when we sold Cape Cod potatoes. Yep. And I used all of that. And, I mean, I didn't need very much to start, you know.

• 26:40Guy Raz?

  You had a co-packer, a co-manufacture?

• 26:42Speaker 01

  Yep, we had a co-packer. I mean, my basic starting expenses were this wonderful graphic designer that we hired. We had, you know, legal fees. Basically, I was the only employee in the beginning. And then I brought my dad out of retirement, which he, I mean, I wouldn't say he like reluctantly came out of retirement, but he definitely, I think he semi came out of retirement.

• 27:04Guy Raz?

  You asked him to help, help you with the business?

• 27:06Speaker 01

  Yes, yeah.

• 27:07Guy Raz?

  So, so I'm, I'm assuming that that was a pretty inexpensive cost, because he was probably doing it for free.

• 27:12Speaker 01

  Oh, yeah, yeah, neither one of us. I mean, I don't think I made a salary for years. I mean.

• 27:16Guy Raz?

  And tell me about the product. It was like a, a Saltine Cracker? Like, what kind of cracker was it?

• 27:22Speaker 01

  So, I mean, the plan was, you know, I wanted to take the three most popular crackers, the three best selling.

• 27:27Guy Raz?

  Ritz.

• 27:28Speaker 01

  Yep, a Cheez-It type product. So it's a cheese cracker and then a Saltine Cracker. And, you know, what was so hard, though, is even though this great organic law had passed, there was still no suppliers. So, I mean, there was maybe one supplier of flour, one supplier of cheese, one supply. I mean, it was very hard.

• 27:49Guy Raz?

  You're talking about organic suppliers?

• 27:50Speaker 01

  Oh, yeah, right, exactly. It was very, very difficult to find every component you needed and get it organic. And everything was new. So it was, you know, you were having to do a lot of convincing, like, there would be a cheese, an organic dairy that would, you know, had cheese potentially that they might dry for you to turn into cheese powder that you could use in your crackers. But it wasn't like there was, you know, a thousand options to choose from.

• 28:14Guy Raz?

  Okay, so you have, or you're gonna do three crackers and you've got some capital to get an initial run. And how did you get into stores? I mean, did you, I imagine you had some relationships from your time at Cape Cod. So, I mean, did you start with Whole Foods? Like, did you, was, I mean, Whole Foods was a thing in 2003, when you launched.

• 28:36Speaker 01

  Yeah.

• 28:37Guy Raz?

  Where did you first, like, have this available?

• 28:41Speaker 01

  So we debuted the company in 2003 at the Natural Products Expo in Baltimore. And we basically left that show a national brand.

• 28:51Guy Raz?

  You signed up with a bunch of different

• 28:53Speaker 01

  Yep.

• 28:54Guy Raz?

  Like, national retailers or regional retailers or both?

• 28:56Speaker 01

  Everything. I mean, we signed up, Whole Foods nationally, we got two big distributor. I mean, like, I mean, as you previously mentioned, there was nobody doing this. If you had a natural food store and you wanted to sell crackers that were organic, we were the only brand.

• 29:13Guy Raz?

  And and did it require you, like, this is, I'm asking this question because oftentimes we've had founders who are like, yeah, I get, I get this contract and it sounds exciting, but actually, it creates a nightmare challenge because you have to find the capital to produce the product and you're not gonna get paid by the customer for 90 days. Did you run into that problem? Or was, were the orders manageable enough where you could actually do it with the cash you had?

• 29:40Speaker 01

  I mean, we could do it with the cash we had. I went, that wasn't our problem. Believe me, we had a lot of other problems.

• 29:44Guy Raz?

  Okay.

• 29:45Speaker 01

  But that was not our problem. So basically, we got all these great orders. And obviously, Whole Foods is an incredible customer. But we also got a lot of customers that where they were really excited about the idea, but organic maybe hadn't taken off in their chain yet and their customers didn't really know what it was. So we got a lot of big orders from stores that probably shouldn't have given us big orders. And about two months after that show, our sales just disappeared completely.

• 30:15Guy Raz?

  When we come back in just a moment, Nicole looks for a way to revive her sales and faces a major crisis, personally and financially, when her dad dies. Stay with us. I'm Guy Raz and you're listening to How I Built This.

• 30:39Guy Raz?

  When I pull up to a gas pump to fill my car, I'm not thinking about chemistry or engineering. I'm thinking about getting in, filling up, and getting on with my day. And it reminds me a little bit of the founders I talked to on this show, because the best ones obsess over things their customers will never see. Tiny details, invisible improvements, relentless iteration. And not because anyone's watching, but because it makes the product better. That's what the mobile brand does. It engineers fuel the same way great founders engineer their products. Mobile Supreme Plus Premium Gas helps keep engines three times cleaner, which can mean better performance and improved gas mileage. It's for people who care about what's under the hood, even if they never see it.

• 31:24Guy Raz?

  Three times cleaner compared to mobile regular gas in port fuel-injected engines. Actual results may vary. Visit mobili fuels.com for details. AI isn't just opening new business opportunities. It's changing the way businesses get work done. The questions they ask, the decisions they make, the routine tasks they can hand off. That's the idea behind NetSuite Next, the next generation of NetSuite with AI woven into the tools your business already relies on. NetSuite Next surfaces insights exactly when you need them, puts agents to work on routine tasks and problems, and lets you ask complex questions in plain language, like talking to a knowledgeable colleague.

• 32:08Guy Raz?

  But technology is only part of the story. AI is also reshaping how people and teams work together. And that shift is already underway. That's why NetSuite wants to put a new expert-created business guide in your hands today. It's called Aligning for the Agentic Era: How AI is Changing Everyday Work. And right now, it's yours, absolutely free. Inside, you'll discover how AI could reshape work across your entire organization, and how to position your business to prosper from it. If your revenues are at least in the seven figures, get NetSuite's free business guide, Aligning for the Agentic Era: How AI is Changing Everyday Work, at netsuite.com/built.

• 32:52Guy Raz?

  The guide is free to you at netsuite.com/built. netsuite.com/built. Does your team want a website that looks and feels handcrafted but is still fast to ship? Well, Framer is built exactly for that. With Framer, you design on a visual canvas with responsive layouts, hosting, and a CMS built in, so the work is production-ready from day one. And you can get it done with help from Framer's AI agents. Framer is the AI website builder that helps creators, teams, and businesses ship production-ready sites faster than ever while getting every detail right.

• 33:33Guy Raz?

  Prompt, inspect, edit, and publish in one place at a whole new pace. AI agents and humans work together. The agents bring speed and scale, and people bring taste, judgment, and control. Learn how you can get more out of your site from a Framer specialist or get started building for free today at framer.com/built for 30% off a Framer Pro Annual Plan. That's framer.com/built. Rules and restrictions may apply.

• 34:16Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's the early 2000s, and Nicole is trying to recover from an unexpected dip in cracker sales after store customers seem indifferent to the product. And in order to help turn things around, she brings in a new person to help, her husband, Peter. And what's his background? Is he a finance guy?

• 34:38Speaker 01

  No, he was in the film business, like movies.

• 34:41Guy Raz?

  Right.

• 34:41Speaker 01

  That's his background.

• 34:42Guy Raz?

  Yeah.

• 34:44Speaker 01

  And, you know, marketing, and he's very creative. He's-- I mean, he's honestly created a lot of things, but that was his background.

• 34:52Guy Raz?

  Which is your dad, too. And your dad is-- he's a skilled operator. I mean, he has run a snack foods business.

• 34:59Speaker 01

  I think the things that were very different about crackers and snacks, there was a few things, assumptions, that we had made in our financials that were wrong. Basically, I mean, if you think about it, you go through probably 10 to 1 bags of potato chips to boxes of crackers.

• 35:14Guy Raz?

  Easy. I can't remember the last time I bought crackers.

• 35:16Speaker 01

  Right. You know, I think we were assuming a much faster velocity on crackers than we got.

• 35:22Guy Raz?

  And why is that? Is that because people just buy potato chips, pour them in a bowl, and stick them in front of the TV? Or when people come to their house? Like, you would have crackers if you had cheese, I guess.

• 35:31Speaker 01

  Yeah, you just--

• 35:32Guy Raz?

  But why? I mean--

• 35:35Speaker 01

  Yeah, people just-- crackers are more of an occasional use item, and chips are, you know, you tend to open a bag and finish it.

• 35:41Guy Raz?

  And you didn't-- they didn't come into focus until you actually started selling your products.

• 35:46Speaker 01

  Right. And we realized, okay, we're not getting the velocity we thought we would. And there's so many other things about--

• 35:51Guy Raz?

  And you had the comparables from the chips. Because you were like, why aren't these selling like the potato chips?

• 35:56Speaker 01

  Yeah. But, I mean, kind of the vision was there, right? I knew I wanted them to taste like the conventional ones. I mean, I have built my entire career out of making organic and natural products, healthy, organic, natural products, taste like conventional ones. And I think we did that. Like, I think they really did taste great. You know, no, but we just-- we didn't have anybody for marketing. Nobody knew we were there.

• 36:18Guy Raz?

  How many people-- was-- were you in 2003, '04, or '05? Like--

• 36:22Speaker 01

  Oh, like at the company?

• 36:23Guy Raz?

  Yeah.

• 36:24Speaker 01

  Oh, like five.

• 36:26Guy Raz?

  Five people. Okay, so you were lean, and you were running it out of an office in New York City?

• 36:31Speaker 01

  No, I had actually moved back to Cape Cod at this point.

• 36:34Guy Raz?

  So you're running it out of Cape Cod, but using co-manufacturers?

• 36:38Speaker 01

  Correct.

• 36:38Guy Raz?

  And like where?

• 36:39Speaker 01

  Ohio at the time. Yep.

• 36:41Guy Raz?

  And just as an aside, why wouldn't you pursue your dream of organic potato chips at that point? Were you restricted by-- you know, because of the sale?

• 36:50Speaker 01

  No, you know, I think it was part of the issue was-- I do still, like, love Cape Cod potato chips. I felt very connected to that brand. I don't know that I ever fully wanted to compete with it, to be honest. And I also think ultimately, I wanted to make a healthier product. Like, I think what I wanted to feel good about was putting a product out into the world that was a little bit healthier, still organic, taste delicious, like all of those things I wanted. But, you know, I don't know that, like, potato chips is really like my thing.

• 37:21Guy Raz?

  I'm curious. Did you-- you know, people probably made assumptions-- people who knew you or knew your story a little bit made assumptions like, oh, you know, she's the daughter of the Cape Cod people, and they're just, you know, swimming in cash and blah, blah, blah, which was not the case, right? I mean, you had some money from that, but not enough to fund your business forever and sustain your life. But also, you know, I wonder if you ever-- at that time, if you ever felt like, I'm going to prove myself here. I need to show that I'm not-- you know, this isn't coming easy to me.

• 37:57Speaker 01

  Well, I think it's a couple of things. I mean, one, I didn't have any money. I mean, my dad was not a big giver of money to his children.

• 38:05Guy Raz?

  I mean, people didn't know that, right? They just knew that you were the Cape Cod chips family.

• 38:11Speaker 01

  But, I mean, I don't deny that I was very lucky. And I, you know, I don't deny any of that. I mean, I grew up in an environment where my dad gave me the ability to do this, follow my dreams, and my mom. You know, like, I'm fully aware of how lucky I was and how grateful I am for having had that. I mean, and I think that everybody, you know-- nobody really believed any of it was mine. I mean, even though I started the company, I mean, everybody thought my father was doing it. And, I mean, I did want to prove myself, but mostly, I just wanted the company to succeed. And I also really felt strongly that the only way to help the organic food movement grow was to make delicious tasting products

• 38:54Speaker 01

  that people would like back into finding out about how they were made. Like, someone would pick up a box of crackers at their friend's house and be like, wow, these are delicious. And then say, oh, these are organic. And then get excited about the fact that they're organic in hindsight.

• 39:10Guy Raz?

  All right. So the cracker brand is doing okay, right? But now you're several years in. And the underlying problem with the business still exists, which is you don't really have a hero product, right? And as you've said, you still aren't growing as fast as you'd hoped, right?

• 39:28Speaker 01

  Well, you know, one of the things I think about the food business is it's very hard to be a national brand that isn't growing fast. It's just like, our business isn't designed to support like, slow, steady growth. But I really believe in slow, steady growth, because I think that that's how you build a strong foundation. I think if you can make your mistakes fast and as small as possible, that's going to be much better for your brand in the long term. I think one of the challenges we were having is just some of our products were so expensive. At this point, we realized that crackers wasn't going to really be our future. We were trying to figure out what our next pivot was going to be to, you know, what is the product line that is adjacent to these crackers, but can like catapult

• 40:11Speaker 01

  our brand to the next level. And, you know, we had experimented with a few different things, like we had some sandwich cookies. And again, like, I felt like we were getting like, further and further away from like, my vision of like, health and all these things. And, uh, but the, I will say, the sandwich cookies were, we used real dark chocolate. I mean, they were really good.

• 40:31Guy Raz?

  They were like Oreos?

• 40:32Speaker 01

  But they, but instead of like, I mean, we use like, real Madagascar vanilla, not like vanilla flavor, organic, too.

• 40:38Guy Raz?

  Yeah.

• 40:38Speaker 01

  We use real dark chocolate that we made ourselves. I mean, there were so many things about them that were just so incredibly special. But they should have been like, three times as expensive as what we were charging for them.

• 40:47Guy Raz?

  So you were, you were, basically, you were losing money on every sale of cookies?

• 40:52Speaker 01

  I mean, not on every sale, but if they were on promotion, or, I mean, we just, it was very difficult to make money with those cookies. And-

• 40:58Guy Raz?

  Especially with those ingredients?

• 41:00Speaker 01

  Yes. Yep.

• 41:01Guy Raz?

  All right. You did take some investment on, and I think in 2007, right? You did have this snack brand, Snyder-Lance, which had purchased Cape Cod-

• 41:11Speaker 01

  Correct, yes.

• 41:12Guy Raz?

  They put in, they bought about 20% of, of late July in 2007.

• 41:17Speaker 01

  Yes. We were at a trade show, and they asked us if we would be interested. And they had this manufacturing facility that they had just bought, and it was, you know, didn't, wasn't really being utilized fully, would we be interested? And as it turned out, we were very interested, because we were, at this point, we had built like, a tiny factory on Cape Cod. I mean, there was a lot of things going on, but it, none of it was working financially. So this factory down in Georgia was going to be a much better solution for us. But in exchange, they wanted like, a small investment. And, I mean, that was great, because one of the things I really liked about having a strategic investor versus like, what my dad had done with Cape Cod potato chips, is, you know, strategic investors

• 42:00Speaker 01

  don't have the same time horizons as, you know, when you bring in like, a VC-type investment. And so, you know, I, I looked at them more as a partner that was going to just be this manufacturing solution for us, and also potentially help with other things. Uh, but not really, you know, they weren't going to put some artificial timeline on us. And they also had no rights to buy the rest of the business.

• 42:22Guy Raz?

  So they put in a, they bought a minority share, but, but they basically said, we're not going to buy any more of the business?

• 42:28Speaker 01

  Well, I wasn't interested in selling them. Like, I didn't want to have to sell them the business. Um, but, you know, what I now realize in hindsight is, whenever you take a strategic investment, whether or not you intend to sell them the business, you should expect that to be the outcome. And the earlier you can know that, when you're negotiating, probably the better. But, um, that was not my thinking at the time.

• 42:50Guy Raz?

  All right. So there's that. And you're, you're humming along, you're doing well, you had 8 million in sales, but, um, you've got the, the cookies. It's around 2008. And what's going on at the business at that time?

• 43:04Speaker 01

  So, I don't know if you remember, around that time, we were also, the country was heading into a recession.

• 43:10Guy Raz?

  I remember well.

• 43:11Speaker 01

  Yep. And we realized that the cookies were never going to be a profitable part of our business. It was $2 million of our sales, but the, the right thing to do was to discontinue them.

• 43:24Guy Raz?

  Yeah.

• 43:25Speaker 01

  But I struggled with it a lot, because it was a product that was very personal to me. We had just launched this line of organic, mini sandwich cookies with the Jane Goodall Institute. And they all had these endangered animals on them, and the money was going to the Jane Goodall Institute. And on the front of the package was a depiction of like, my dad and my two sons. And, I mean, it was like, the most personal product I think I've ever created. And then, right at this time, we're sort of contemplating all of these things about our future, and what do we stand for, and who do we want to be? My dad got diagnosed with a terminal cancer. And it was just this moment where, I mean, the business was working, but not working great. Um, we had to discontinue

• 44:09Speaker 01

  $2 million of our $8 million, basically. And we also had to figure out what we really wanted to be, and my dad was dying.

• 44:20Guy Raz?

  Wow.

• 44:21Speaker 01

  So, I mean, you know, one of the things I think is really important for entrepreneurs, or at least it has been for me, is that I think even in like, the darkest days of everything that's ever happened to me, there was never a moment where I even contemplated failure. It, like, it just, it never crossed my mind that that was a possibility. And, I mean, it was extremely stressful, you know? Uh, you know, we had now had two kids at the time. My husband and I are working together, my dad's dying, and, um, the business is, I mean, I would say it's doing okay. Now, in March of that, yeah, 2009, my dad passed away. And I remember being at his

• 45:06Speaker 01

  wake, and some of the individual investors we had, not the strategic, they were actually wonderful, but the, the individuals that we had, tried to organize a shareholders meeting at my dad's wake. And, you know, that, like, basically, could I run this company without him?

• 45:22Guy Raz?

  Oh, because they had invested money?

• 45:25Speaker 01

  Because of my dad.

• 45:26Guy Raz?

  Because of him. How, and how much, how much total had they put in?

• 45:29Speaker 01

  Not very, I mean, I think most of these people were like, less than 100,000 of, I mean, which, hey, I, anyone who invests money, it's, it's important, and it's meaningful, and I'm grateful for it. But it wasn't, you know, a significant investment. Um, but they had tried to organize this shareholders meeting at my dad's wake. And I remember just thinking, like, it was a very stunning moment. And then, three weeks after that, I got a letter from, so we had a, a large equipment loan for, when we did this deal with the strategic, we had to buy a bunch of equipment for their facility. So we had this large equipment loan. And at the time, you know, interest rates were so low, that most banks were like, kind of upside down in some of these. And we had a death of a

• 46:12Speaker 01

  member clause in our loan agreement, and we were an LLC, and my dad was a member. So they used his death to put our loan in default.

• 46:21Guy Raz?

  They basically, because he died, there was a clause that allowed them to call that loan?

• 46:26Speaker 01

  Correct.

• 46:28Guy Raz?

  How, how much was the loan?

• 46:30Speaker 01

  It was like, a three and a half million dollar loan.

• 46:33Guy Raz?

  What, and how much time did you have to give them the money?

• 46:35Speaker 01

  Well, the letter gave me like, I can't even remember, like, 30 or 60 days to cure this default. So obviously, incurable.

• 46:42Guy Raz?

  Wow.

• 46:43Speaker 01

  And, I mean, I tell everyone I talk to, like, if you get debt, get Keyman Insurance.

• 46:48Guy Raz?

  Keyman Insurance is when a member of the executive team, whatever, dies-

• 46:54Speaker 01

  Yeah.

• 46:54Guy Raz?

  Then you can use that money from the insurance policy to pay off any loans, or-

• 46:59Speaker 01

  Yes. Right, yeah. Or just even, like, if, if it's going to cause major business disruption, you know, it's just helpful to, so, I mean, and I think the thing is, in addition to always believing that things are going to work out, the idea that someone could die had never, I mean, that's just not something you contemplate. And even my dad, facing a terminal diagnosis of pancreatic cancer, I don't think fully believed he was going to die.

• 47:20Guy Raz?

  And, I mean, he was in his 50s, right?

• 47:23Speaker 01

  Well, he was 60 when he was diagnosed, and 61 when he passed.

• 47:27Guy Raz?

  He was a young guy.

• 47:28Speaker 01

  Yeah, he was very young. And I remember, honestly, as he was dying, one of the last things he told me to do was to go to this, that trade show where we had launched our products. It was coming up the weekend that he passed away. And he goes, you got to promise me you're going to go. And I remember saying, okay, dad, I'll go. But I obviously wasn't, I was never going to leave. I mean, he was dying. I didn't want to be in a trade show when that happened.

• 47:50Guy Raz?

  Yeah.

• 47:55Guy Raz?

  So you had, you're basically an $8 million business. You give up $2 million of your sales because it's cookies and it's not going to work. So you're going to become a $6 million business temporarily. But then you get a $3.5 million loan that's being called in. You've got to come up with the cash in 30 days.

• 48:11Speaker 01

  Yeah. I mean, it was a terrible time. I mean, it was just a terrible time. And, you know, again, we're discontinuing these cookies. We hadn't done it yet, by the way. So we still had the sales. We hadn't done the discontinuation. It was just, we were going to do it. So we were planning to discontinue these products. And, you know, but now we had this new problem of having to replace this debt. Oh, and I also would just like to point out that during my dad's wake, my youngest son nearly died because we found out that he had a life threatening peanut allergy. And so our number one product at the time was a peanut butter cracker. And once I came out of like the fog of the wake and, you know, I mean, just everything and we're sitting there and my husband and I are looking at each other.

• 48:55Speaker 01

  And, you know, I think, I mean, we just like rolled up our sleeves and went back to the office and said, what's next for us? And I remember like gathering the team around and, you know, I'm just, I remember telling everybody that we're going to make it. It's going to be great. Just trust me.

• 49:13Guy Raz?

  How many people at that point did you have working for you in 2009?

• 49:17Speaker 01

  Probably like 12.

• 49:19Guy Raz?

  And I'm thinking, I mean, optimism's great, but like, I'm thinking, if you're being transparent with me, you're telling me what's going on, I'm thinking, we're not going to make it. We are not going to survive this. $3.5 million? I mean, you've got 30 days?

• 49:33Speaker 01

  There was a couple of things that could have happened. I could have lost control of the company. I could have sold more to investors. I could have, you know, stepped down. I mean, there was a lot of things I could have done to save the business that I didn't want to do. But what I really wanted to do was just find someone to take on this debt. But it's the height of the recession.

• 49:49Guy Raz?

  Nobody's giving any money. No one, nobody, I mean, here in the Bay Area, like, VCs just like, if they were lucky and they were still in business, they were, nobody was writing checks.

• 50:01Speaker 01

  No. So like, I managed to convince the bank to give us more time. That was the first thing I did. I was like, listen, I was like, we're a viable business. The best thing that you can do is let us get the money for you. And then I, I'm at a trade show, again, actually the same trade show where we launched our business.

• 50:20Guy Raz?

  The Expo East in Baltimore, huh?

• 50:22Speaker 01

  And I was giving a presentation to, I can't even remember what the panel was, but they asked me to speak on a panel. And I'm thinking like, you know, I had nothing valuable to tell anybody at this point, but I remember thinking, here's my chance to just tell our story and maybe someone will hear it and want to help us. Oh, so in, later that day, I was actually supposed to talk to Meg Hirschberg, who is the wife of Gary Hirschberg, who started Stonyfield Farms.

• 50:48Guy Raz?

  Oh, she's going to kill it, sure.

• 50:49Speaker 01

  And she was, she in and of her own right, is a very accomplished business writer who was writing for Ink Magazine at the time. And she had reached out about doing this interview and, you know, was thrilled to do it because obviously the chance to get in Ink Magazine could be very helpful for our brand. And halfway through me telling the story, she's like, hold on a second. So she actually calls Gary on the phone and she's like, you have to meet this person I just met. And Gary decided to invest in us at this time.

• 51:18Guy Raz?

  Wait, let me just, let me just get this straight. You're, you're talking to somebody who's writing an article for Ink Magazine and you're telling them that you are in dire financial straits?

• 51:25Speaker 01

  I mean, I'm telling them the good parts of the business, too.

• 51:28Guy Raz?

  Well, you said, well, now we're in this situation where we owe the bank $3.5. It's just odd because it's unusual because normally people would not say that if they're trying to get a good article written about them. They would just try to not.

• 51:40Speaker 01

  Like, in, in, knowing I was meeting Meg that day, I read some of the stuff she'd written. And if you read about the early days of Stonyfield.

• 51:48Guy Raz?

  Oh, I know all about it. It was a failure after failure. Gary's was on the show eight years ago.

• 51:54Speaker 01

  Yeah. So, I mean, I felt like I was talking to a sympathetic ear, even though it was Ink Magazine and all those things. But, so a couple of things happened as a result of this. I also get introduced to a new type of bank based in San Francisco called RSF Finance, which was funding mission-driven, socially responsible businesses and Waldorf schools. So I met with RSF Finance and they agreed that they would in fact take over our debt.

• 52:24Guy Raz?

  So they, it was a loan. It was not an investment. It was an equity.

• 52:27Speaker 01

  Correct. It was a loan.

• 52:28Guy Raz?

  I want to break this down because you get the, you get the loan and you can refinance the company, right, and the debt. And you're going to shed the cookies. We know that, but you're still a crackers company.

• 52:40Speaker 01

  Correct. So part of what I always wanted was to be a snack company.

• 52:46Guy Raz?

  Right.

• 52:47Speaker 01

  And, you know, my husband and I had been wanting to get into other snacks for quite some time. And my dad was really discouraging it because even though crackers didn't have the same turns as potato chips, you also didn't have the same complications. And I always feel like there's two ways to be successful. You can be the, a big part of a small category, or you have to be a smaller part of an enormous category. And, you know, I think my dad was more satisfied staying in the big part of a small category. I don't think he was enthusiastic about jumping back into the snack, you know, world again with something even more competitive. But that was sort of, kind of, I think, what my vision had always been. And now that with this son with a peanut allergy, I also wanted products that were like more inclusive.

• 53:30Speaker 01

  Like, I really felt strongly that I wanted products that were delicious, organic, but also that almost anybody could eat. And one of the few things that we could come up with that all of those different categories were tortilla chips because they're naturally gluten free. They naturally don't have nuts in them. They're healthier. They're, in, in the way we made them, they're, you know, they had multi-grain ingredients. They had all these cool inclusions, chia seeds. And so that was what we had kind of envisioned, but.

• 54:01Guy Raz?

  But I just want to, sorry, I want to go back for a sec because I get it. You're going to make healthier tortilla chips, but, but now you're in, you know, six years in and, you know, the crackers are growing not as quickly as you wanted. So I'm trying to understand why you, you start to think about tortilla chips because you're looking at this category and you're saying, this is actually going to give us a better opportunity to grow? Or because it's a Hail Mary? Or because something else?

• 54:31Speaker 01

  I think it was a combination of all of those things. So we, so now it's, so we basically left 2009 with a new bank, new investor, a new lease on life. But we still didn't have that like hit product that we needed. And, you know, the tortilla chips just hit all of the marks that we wanted. And it was one of those things that if it didn't work, the company for sure would have failed because we were discontinuing $2 million. We, you know, we were going to put a lot into this new launch. So, I mean, I guess in a way it was a Hail Mary. I mean, I don't think I necessarily looked at it that way, but in, in reality, it was. And I think what was so interesting, like, as I like reflect on it right now, was I

• 55:15Speaker 01

  remember for the first time, it was the product that like, I think I had been wanting to make my whole life. You know, it's like, I feel like everything about what I had done sort of brought me to this moment because it was really the thing I wanted as a kid.

• 55:30Guy Raz?

  And was that a challenging product to make? Or was it actually fairly easy to do?

• 55:36Speaker 01

  Well, it's not a challenging product to make exactly, but also now, we were still making most of our products down in Georgia at that factory. And my husband was going down there like weeks and weeks and weeks at a time. And our kids are, you know, little, we're still not making salaries. I mean, like, everything was kind of bad. And Gary gave us this great piece of advice. And he asked us, like, what is the single thing that is hurting your lives the most? Like, what is making your life like untenable right now? And, you know, I said, honestly, my husband being gone, like him not being able to be in the office, because we didn't have anyone to help us with the kids either.

• 56:20Speaker 01

  So we were just sort of, like, the kids were either at the office with us, they were in school, like, we were sharing duties, like, we never traveled at the same time so that someone was always home with the kids. But we, we always felt like anything that would make our lives better was like a luxury we couldn't afford. And Gary's advice that that isn't a luxury, like you being present fully to run this business is what this business needs. So we hired a manufacturing person to take over that role. And we were able to get that product line off the ground in 2010.

• 56:54Guy Raz?

  Yeah. But the, the tortilla chips, like, again, it's like, it covers the gluten free and the peanut free and allergen free. And it's, it's going to be the best, sort of healthiest option in that kind of snack aisle. But this is a different part of the snack aisle. I mean, when you do that, like, you've got late July as a, as a cracker brand, is it fairly easy to just call up the stores and say, hey, we've got tortilla chips, can you just slot them into the chip, chip aisle?

• 57:24Speaker 01

  No, it's, it's very hard. It's a completely different part of the store. Sometimes it's different buyers. I mean, and usually it's very difficult for a brand to go into two different categories like that. I mean, I think the odds on us doing it were slim. And I think most people thought we couldn't do it. In fact, one of our salespeople came back and he said that he overheard another salesperson that had actually worked for my dad at one point, talking to our buyer to saying like, oh, that company is never going to make it. You know, Nicole's running it. It's, it's over for them. And obviously I was pretty angry about that.

• 58:07Speaker 01

  But I was used to people not, people underestimated me throughout this entire exercise. So that was not a new phenomenon. But I was just very disappointed that this person who I thought was kind of a, you know, a friend to my dad and a friend adjacently to me would do something that hurtful was just, you know, realized that that was probably what people were saying out in the market.

• 58:30Guy Raz?

  Did that in some ways motivate you? That, that, did that create like a, a fuel that, you know, where you're like, I'll show them? Or, or was it more like, I'm really hurt by this?

• 58:42Speaker 01

  Well, I can tell you, I picked up the phone and called him. I said, hey, I, you know, I said, if you have thoughts and you want to discuss, you know, the future of our company, feel free to call me anytime and we can, we can hash it out. But I'd really appreciate it while we're trying to, you know, save this business. If you would stop going around town and saying that I said, it's just not, it's not, not the right thing to do. And I mean, he was mortified, but it was, you know, I, I think it absolutely motivated me. But I think honestly, at this point, I was also just pretty focused on just making the business survive more than like, I called him because I wanted him to stop telling our customers this information, not because I wanted him to, you know, like, I really felt like people going around and saying that was just bad for business.

• 59:26Guy Raz?

  Yeah. How, how long? I mean, I'm thinking tortilla chips, especially if, you know, you've got a co-manufacture. And again, correct me if I'm wrong, where I'm thinking they're not that complicated. You've got corn, you're grinding them into tortillas, you're then cutting them up and then frying them. And you are using presumably organic corn. What was it? Did it take that long? I mean, how long did it take for you to come up with a, a prototype that was great? That was good enough for you?

• 59:52Speaker 01

  It did. I mean, it took us quite a while to develop, you know, what, what ultimately would become this product. I mean, it wasn't something that we did overnight. Plus, we did some seasonings on them, which were very complicated. And, you know, it was, it was, it was a pretty tricky line. And so a couple of things occurred at the same time. So Whole Foods decided, they said that they would give us a chance, but they launched us at the exact same time as Kettle decided to get into the tortilla chip business with a brand called Tia's. So Whole Foods launched us at the same time, but they gave Tia's all of the displays, not us. So they were outselling us pretty significantly. Then separately, we realized for conventional stores, you needed this totally different

• 1:00:35Speaker 01

  form of distribution, which we didn't have. So I got a distributor to agree to distribute us if we could get into Stop & Shop.

• 1:00:43Guy Raz?

  And Stop & Shop is mainly New England, I think, right?

• 1:00:45Speaker 01

  Yes. Yeah. Yeah. And I also just want to mention one other thing. I had never really done a lot of sales at this point because I was kind of nervous about doing my own sales. But for this product line, I really felt like-

• 1:00:56Guy Raz?

  You were doing operations mainly?

• 1:00:58Speaker 01

  Yeah, finance, yeah, exactly. And-

• 1:01:02Guy Raz?

  Your dad had been doing a lot of the sales or other people?

• 1:01:05Speaker 01

  Yes. My dad and other people. And my dad is so good at it. Like, he just was a great salesperson. And, you know, I think because of that, it just wasn't something that I needed to do. And I also didn't feel like I would be very good at it. I'm, I'm kind of shy. I'd never really done it. So I, I got an appointment to go to Stop & Shop. And this is my first real big, like, make or break sales call, too, because I really needed them to say yes, because without them, I couldn't get the right distribution and we wouldn't be able to get this whole other type of sales. So I went down there and I remember I was super nervous because, I mean, essentially, this is our hail Mary. This,

• 1:01:46Speaker 01

  you know, switching into tortilla chips was pretty make or break. And I really needed this customer because without it, you know, we weren't going to have enough business to keep the line going. And I, you know, I, I'm never great about sticking to presentations. I always sort of drift or tell my own stories. But I was so nervous, like, I actually read the presentation in this meeting because I didn't want to screw it up. And, and I got it to the end and I realized I hadn't been listening very much, which is probably the most important thing you're doing when you're in sales is listening. But I was too nervous. So I got to the end and I was just staring at the buyer and he's looking at me and, and he said, is there anything else, you know, that you have to ask or say? I was like, well,

• 1:02:31Speaker 01

  there, there's one thing. I'd really like to know if you're going to say yes, because if there's any way you could tell me right now, it would like change our, our business in such a fundamental way that I'd be grateful for the rest of my life. So if there's any way at all, you can say yes. And he looked at me and he said, yes. Which, I mean, I've been on a thousand sales calls since and that has never happened. That never happens. He said, yes. And I remember thinking I should get out of this room as quickly as possible before I screw this up in any way. So I thanked him and I left and I called the distributor and I said, Stop & Shop said yes. And they agreed to take on the product. And basically, that was the moment that made us the overnight success, you know, seven years in the making.

• 1:03:18Guy Raz?

  When we come back in just a moment, Late July succeeds to the point where Nicole has to say goodbye to it. Stay with us. I'm Guy Raz and you're listening to How I Built This.

• 1:03:37Speaker 02

  Joe Button here. Football season is finally back and PrizePix is bringing out their best offer yet. New users who sign up will get $150 in lineups if you win your first $5 lineup. That's right. If you win your first $5 lineup, you'll get $150 in lineups. On PrizePix, you simply pick two to six players, pick more or less on their stat projections and submit your lineup. Then sweat it out as you watch your picks play out live. It's the best way to get more locked in on game day. Make all the picks you want this football season, all in the same app. Also, PrizePix is going crazy with the deals to start the football season, giving users a new promo every day during Stack September. And now,

• 1:04:19Speaker 02

  PrizePix is available nationwide. So what are you waiting for? Lock in for kickoff because everyone and everything is on PrizePix. What you want?

• 1:04:27Speaker 03

  Download the app today and use code WONDERY to get one of your $50 instantly in lineups if you win your first $5 lineup. PrizePix, run your game.

• 1:04:47Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2010, seven years after launch, and Late July finally has a hit product, organic tortilla chips.

• 1:04:59Speaker 01

  I think our products tasted excellent. And there wasn't a lot else available that was excellent, organic, healthy. That just wasn't something that other people were really focused on. And I do think it was a little bit of the right product at the right time.

• 1:05:19Guy Raz?

  I mean, you've gone from like, you know, eight million sales, barely hanging on, on track to within a three years to get to $100 million.

• 1:05:30Speaker 01

  I mean, it was, it was honestly, I think the thing is that because I was probably optimistically delusional during the, the low period, I, I felt like we were always going to get there. So I don't think I was as floored by our success as I probably should have been. But all of a sudden, we could afford things. We were able to hire the people that we needed. You know, we were growing like we had never grown before.

• 1:05:57Guy Raz?

  Yeah. Were you surprised at how quickly that happened?

• 1:06:02Speaker 01

  I mean, you know, the one, the other thing that I've realized now in hindsight is there does, like, a brand does get to a little bit of a critical mass once they reach a certain size. I mean, it's not like success lifts all boats, but it kind of does. You know what I mean? It's like, all of a sudden, you're, people are seeing you more places. Your, your brand just starts to have more relevance. And I remember one of our, our kind of proudest moments, we were now launching new lines of tortilla chips and other types of products. And at one point, we won a taste test for one of our products over Tostitos. And, I mean, this is what I had wanted to do since I was a little kid, basically create these products that tasted better than conventional, so that people who want to eat natural, organically, aren't sacrificing anything and they can have the

• 1:06:45Speaker 01

  exact same stuff that you can get from conventional products. And I finally felt I had done it.

• 1:06:50Guy Raz?

  How, with that, like, rapid expansion and growth, you had to hire more people, you had to really build this out quickly. How, I mean, you know, by the time you hit $100 million in sales, I was thinking around 2014, 2015, how many people are working for Late July?

• 1:07:07Speaker 01

  You know, we were still pretty lean. I mean, we only ever had about 27 people.

• 1:07:11Guy Raz?

  Wow. Wow. So you did not own, it wasn't vertically integrated, you didn't have your own, own your factories, you didn't own assets. But it was the brand that was valuable. It wasn't the means of production that mattered.

• 1:07:23Speaker 01

  No, it was the brand. I mean, the one thing that I know about building a brand is, starting is not really the hard part. And even getting to a million dollars isn't really the hard part. It's really getting from like 10 million to 50 million is probably the hardest part. And then, you know, I think after that, it's hard for different reasons. But 50 to 100 is, is actually quite a bit easier than 10 to 50.

• 1:07:50Guy Raz?

  Okay. So you are, I mean, you really-

• 1:07:54Guy Raz?

  Land on a great product and it is taking off. And by 2014, Snyder's, Lance, which had invested about 19%, they owned about 19% of the business, they increased their ownership to 80%. Tell me the story because I, from what I heard you talk about earlier, it sounds like this was not ideal.

• 1:08:15Speaker 01

  So, and this is something that I think, you know, all entrepreneurs probably can relate to is we had a lot of individual investors, including my mother, that had been with us since the beginning.

• 1:08:27Guy Raz?

  Yeah.

• 1:08:28Speaker 01

  And I think when you sign up to be an entrepreneur, you sign up. You don't necessarily get to bring those other people along with you and that includes your family and friends or any early angel investors you have. You know, you have to be realistic about, even though you might be willing to do it for life, they're not necessarily going to be willing to do it for life.

• 1:08:48Guy Raz?

  And so there was this opportunity for them to get some money back from their investment.

• 1:08:52Speaker 01

  Correct. And so it was a really, really tough decision for me. And it was sort of like all the times where I judged my father for selling his business or doing all these things, it was like, it was all coming back at me, you know, and recognizing it from the other side and realizing that you just have to make decisions and they aren't always what necessarily would have been your first choice. But, you know, my mom now was a, I mean, she was actually 59 when my dad died. She was a widow. She was not feeling as financially secure as she wanted to feel at this point. And this was an opportunity to give her financial freedom for the rest of her life.

• 1:09:35Guy Raz?

  Yeah. And, and here you have an opportunity to make good on those early investors, but

• 1:09:42Speaker 01

  Correct.

• 1:09:43Guy Raz?

  They're going to take 80% of the business, right?

• 1:09:45Speaker 01

  Right.

• 1:09:46Guy Raz?

  And so it's a, it's a tricky balance because on the one hand, you know, what do you do? On the other hand, it's a good outcome for a lot of people. You probably were going to get some money to take some money off the table. But again, you were, you knew that at this point, you were going to be working for them.

• 1:10:03Speaker 01

  Exactly. That is true. And I think, I think whenever you take an investor in, you know, you have to recognize that if you take someone's money, that becomes part of the equation and you can't separate that from, you know, your business and recognizing that you've made that choice. But this is where again, Gary Hirschberg was a great mentor to us and he helped us structure a deal that still effectively gave us control of the board, which allowed us to really still control our destiny. And at this point, we were profitable, you know, so like we were a good addition. And as we were negotiating this deal, we did have a little bit of that ability to structure it in a way that still made sense for us.

• 1:10:46Guy Raz?

  But the, the way you're talking about it sounds like, I don't know, maybe I'm reading into it, that it was just, it wasn't exactly what you'd hoped for.

• 1:10:55Speaker 01

  No, it definitely wasn't. I mean, I could have imagined running Late July forever and I, you know, I don't think I really, really wanted to do this, but I also knew that it was the right thing to do for our investors, particularly my mother. And also people had been with us for a very long time. You know, they rode this roller coaster and they didn't necessarily know that they were going to get on to this type of a roller coaster.

• 1:11:19Guy Raz?

  Yeah. All right. So you now, you remain as the CEO, but you now have a sort of a bigger

• 1:11:28Speaker 01

  More significant partner, yes.

• 1:11:29Guy Raz?

  More significant partner. And as often happens with food companies and America, the big fish eats a small fish. And, you know, a lot of, a lot of brands that like we grew up with are now owned by Mondelez or Unilever or whatever. And there's, that's just the way it is. Campbell's, of the Campbell's Soup Company owns many different brands. They acquire Snyder, Lance in 2018. And I'm assuming at that moment, Late July basically becomes part of the Campbell's family of brands.

• 1:12:05Speaker 01

  Well, we were hoping that that was not going to necessarily be the case. We did have a clause in our agreement that allowed us to buy it back in the event that Snyder's sold.

• 1:12:17Guy Raz?

  Yeah.

• 1:12:18Speaker 01

  But apparently they didn't sell, they merged.

• 1:12:22Guy Raz?

  I see. So it was a merger, it wasn't a sale.

• 1:12:26Speaker 01

  Correct.

• 1:12:27Guy Raz?

  I mean, this is just a great reminder of like how contractual language is so critical because we all, all of us would have looked at it and been like, great, we're protected.

• 1:12:38Speaker 01

  There's a couple of lessons here. I mean, the, the one lesson is that I think when a bigger company wants something, you know, you as a small company

• 1:12:44Guy Raz?

  They're going to get it.

• 1:12:45Speaker 01

  They're going to get it.

• 1:12:46Guy Raz?

  And that's ultimately what we decided was, you know, we could fight it, we could,

• 1:12:50Speaker 01

  but in the end, we realized we wouldn't probably win what we wanted.

• 1:12:54Guy Raz?

  And you'd lose a lot of money fighting it.

• 1:12:56Speaker 01

  And we'd lose a lot of money. And also, you know, I really love Late July. It is a brand that is everything I wanted it to be. It stands for everything I wanted it to stand for. And, you know, I didn't want to destroy that and I didn't want to fight with it and I didn't want to send it off into the universe, you know, in this very negative way. I don't really want to spend years in litigation. That's not something that interests me.

• 1:13:20Guy Raz?

  No, it's not fun. It's not good for your health.

• 1:13:22Speaker 01

  No, it's not good for anything. And, you know, I honestly, the brand is still doing great. You know, they've protected it, they, they're growing it. It's still, you know, a strong part of their portfolio and I'm very, very proud of that.

• 1:13:34Guy Raz?

  Yeah. I mean, makes sense. And, and I mean, obviously that's the business end of things, but I'm, I'm wondering on a more personal level, like, like after 15 years of working on this brand, what was it like for you to say goodbye to it?

• 1:13:49Speaker 01

  What's really interesting is so every year, one of the things that we did as a brand is sponsor the Newport Folk Festival in Newport, Rhode Island. My parents had met there in the 60s and like as the sale was occurring, this was like our last big thing. And I remember like we're backstage at this little stage and it was also my birthday. So here I am, it's like the end of July, late July, we just sold this business and my team shows up with like a birthday thing for me and candles and it was like all decorated. And I just remember sitting in like the enormity of that moment and know that, you know, this is the end of this chapter of my life.

• 1:14:33Speaker 01

  15 years of doing this business and this moment is really the end. It was really heavy and I felt pretty sad.

• 1:14:42Guy Raz?

  Yeah. Going back to that, to that acquisition though, in 2018, or merger, right? When, when now this brand becomes part of Campbell's, on the one hand, I imagine now this really is where you get a nice payday and people make assumptions, right? About, well, you know, you sold this business, you made a bunch of money, what a great outcome. And so the assumption is like, this is only great, this is only awesome.

• 1:15:15Speaker 01

  Well, you know, it's interesting, Guy, that everyone had been making that assumption about me already. Like people assumed when my dad sold Cape Cod chips that I had a lot of money. People assumed when my dad died that I got a lot of money. I think people just made assumptions about me and how much money I had and how, you know, just, I think my whole life. And also, you know, I mean, you alluded to it earlier in our conversation, even though I know that Late July was successful because of me and my husband and what we did and the choices we made, I don't think people really thought that was true. You know, I think there's always that, you know, it's her dad. And that's fine, but I, I don't think that, you know, people really attributed it to

• 1:15:58Speaker 01

  me per se. But mostly the fact that, you know, I still feel like there was a lot of work left to do in the supermarket.

• 1:16:08Guy Raz?

  And, and, but that was it. You were out of, of Late July. And, and so you knew already you were going to start something else.

• 1:16:16Speaker 01

  Yeah. So I knew that I was going to start something else. You know, I was still pretty young. I wasn't really ready to retire. And, you know, one of the things that you do with snacks a lot is you display with drinks. So the whole time we were doing the tortilla chips, we were always doing cross displays with beverage brands. And you know what we were almost never doing? Displaying with other organic beverage brands. Besides Honest Tea, the whole beverage aisle was just filled with plastic, filled with sugar. And, you know, the mission that we brought into the, our, to Late July was you just really couldn't find it in the beverage aisle in the same way.

• 1:16:54Guy Raz?

  But, but there were organic drinks by 2019, 2018. I mean, there were.

• 1:17:00Speaker 01

  There was Honest Tea, there was Honest Tea, there was juice.

• 1:17:04Guy Raz?

  Yeah.

• 1:17:05Speaker 01

  But if you look at like the, the number one selling products, there really wasn't like, like sparkling water, sodas. I mean, that whole section was not.

• 1:17:14Guy Raz?

  All right. Let me ask you about this because you want to make an organic sparkling water beverage. And we had Spindrift on the show years ago. And so I know, I know that's a different kind of product because they are using fruit juice and they have some kind of proprietary process that enables them to make it shelf stable. Many of the, you know, the, the sparkling water brands use something called like natural flavorings, which is tricky because in some cases you, you need to use chemicals to extract the flavor from fruits. You were going to use a different process, right? You were going to use different way to flavor the beverage.

• 1:17:50Speaker 01

  Well, we're just using organic flavors. So basically you're taking organic ingredients and extracting them through organically approved methods. And then, you know, you add them to the filtered water. And you, you basically just can't use the chemicals that you would use in a natural flavor. Like you can't use like hexane and those type of gas, like gas type chemicals to get the flavors out. And, and so, you know, I think what's nice about organic flavors is that you know, you basically know what's not in it. But I mean, one of the things that I've learned about being in the organic food business over these years Is that I'm very passionate about it and I care a lot about organic. But I don't think the average consumer cares nearly as much as I do about organic

• 1:18:35Speaker 01

  flavors and their sparkling water.

• 1:18:36Guy Raz?

  Yeah. Before I forget, so you start this brand called Nyxie. And Nyxie, just briefly tell me the name.

• 1:18:43Speaker 01

  Sure. So I started Nyxie Beverage Company. So Nyxie is another name for my nickname, which is Nikki. And also, it's the Norse sort of mermaid mythical creature, which alludes to my connection to water and the Cape and the fact that we are a water-based product.

• 1:19:04Guy Raz?

  Right. And did you, in terms of like, starting this business and funding it and figuring out a structure, I imagine, because you learned so many lessons from your previous two companies, what was going to be different? Were you going to self-finance this? Were you going to have completely different terms for investors? What were some of the things that, because of your previous experience, how did you approach this brand differently?

• 1:19:29Speaker 01

  Well, we were funding it ourselves, so that is number one.

• 1:19:32Guy Raz?

  That gave you a lot more freedom to do what you want to do.

• 1:19:35Speaker 01

  I think what's important about that, I mean, what I think is the most important thing before you bring in any kind of investor is that you know your products, you know your bestselling products, you know, you understand your velocity, like you know exactly what your product potential is. And so, funding that beginning ourselves allowed us to learn a lot about our products before we had to even think about the idea of investors. The unfortunate thing that happened is just after we hit stores, of course, if you know the timeline, we are now heading into the winter of 2020.

• 1:20:07Guy Raz?

  Ah, yes.

• 1:20:09Speaker 01

  And part of, I think, what our real strength is, is retail strategy. But just as we were hitting stores and getting a lot of traction, the brand was doing really well, COVID hit. And, I mean, that just radically changed our business overnight. Because, you know, obviously, if you didn't know about us before COVID, it was going to be very difficult to learn about us during COVID.

• 1:20:32Guy Raz?

  Yeah.

• 1:20:33Speaker 01

  For obvious reasons.

• 1:20:34Guy Raz?

  Yeah. But it turns out that somehow, people did discover this during COVID, right? Like, I mean, you expected, I imagine you expected this to be a disastrous year, but it was okay.

• 1:20:46Speaker 01

  We did expect it to be a disastrous year. And I mean, there was obviously things that were disasters. But the one thing about COVID was that we were all in it together. So, you know, previously, if something would go wrong, like when, you know, when that bank called my loan, every single person I was competing with didn't have their loan called at the same time, just I did. And so during COVID, every single brand on the store shelves, every single brand that you were working with or around or surrounded by was dealing with the exact same problems that you were.

• 1:21:16Guy Raz?

  Yeah. Tell me a little bit about, I mean, you have started with sparkling water, Nyxie, and now you've got sparkling soda. It's all no calories, no sugar, right?

• 1:21:25Speaker 01

  Correct.

• 1:21:26Guy Raz?

  And your sweetener is stevia.

• 1:21:27Speaker 01

  Yep.

• 1:21:28Guy Raz?

  This is a, I mean, super highly competitive space, right? I mentioned some brands, La Croix has been around for a long time, it's a big brand, of course, not organic, and Spin Drift is somewhat different because they use fruit juice. But there's like, Topo Chico has it, Liquid Death has sparkling beverages, and Pepsi makes one, I think Bubbly, I mean, I think Coca-Cola got into this with AHA. Like, this is a very competitive space. So tell me what you've been learning over the last five, six years, really getting into this space.

• 1:22:01Speaker 01

  Well, what, I mean, first of all, again, I go back, taste is everything. Like, you know, with any product you create, people will only buy it a second time because they like the way it tastes.

• 1:22:09Guy Raz?

  Yeah.

• 1:22:10Speaker 01

  The mission is what makes them feel connected to your brand, you know, gives you the loyalty. But the taste is always going to be the most important thing. And, you know, we really focused on taste for our sparkling water, and I think that's how it found its market. We put a little bit more flavor in, we're highly carbonated, and, you know, I think ultimately, that's what, how we found success.

• 1:22:31Guy Raz?

  Yeah. What do you think your dad would have made of your, of this beverage brand? I mean, it's all over the place. I see it, definitely, every time I go into Whole Foods, it's a totally different category.

• 1:22:44Speaker 01

  I'm sure he would have been upset when I told him I was going to start a company. I'm sure he would have said, I mean, honestly, getting out of a snack business and starting a beverage business is maybe one of the stupidest things that you can do. You went from the second hardest category to the first hardest category in the supermarket.

• 1:23:02Guy Raz?

  Beverage is the hardest category so far that you've been involved with, easily?

• 1:23:05Speaker 01

  I would say so, Nikki. Maybe just because of distribution. Like, the sales part is honestly very similar. Like, you need similar velocities, you need, like, the path to success, like, store-wise in terms of sales is very similar, but the means of distribution is so different.

• 1:23:20Guy Raz?

  You know, I wonder, like, what is it that motivates you now, right? Like, you could probably, within the next couple of years, sell this again and make a bunch of money and maybe start something else, or maybe not. Maybe start a foundation. Like, I've interviewed hundreds and hundreds of founders on the show, and people make decisions for different reasons. Some people just didn't really, they just wanted to retire, they wanted to golf, or they wanted to run a foundation, or they wanted to get into philanthropy, or they wanted to start their next business, or they want to basically work until the day they die, right? What is it that, like, gets you going and gets you excited about doing this every day?

• 1:24:02Speaker 01

  I mean, first of all, I love food, and I love, like, people go to the grocery store, they buy the products that I make, they bring them to the beach with their friends, they serve them at the dinner table with their family. To be a part of that in so many people's lives, you know, is just something that is, I feel incredibly grateful for, and it motivates me, like, every single day. I think being able to create a place that is a good place to work is also really important to me. I am very proud of, you know, our employees that have grown with us over the years. We've seen people meet their spouse, have a family, go back to school, come back to join us, like, leave to go work at another company and then rejoin us.

• 1:24:46Speaker 01

  And, you know, I've watched people grow these incredible careers. You know, we get to give back in a way that is very meaningful to us. Like, every year, we do this program that we started at Late July, where every single one of our employees gets to pick a charity that's important to them, and either Peter and I will donate personally, or if the company can afford it, the company will do it.

• 1:25:07Guy Raz?

  Mm-hmm.

• 1:25:08Speaker 01

  You know, it's just, like, I mean, it's pretty much a dream to get to do this.

• 1:25:14Guy Raz?

  Yeah. What do you, you know, it's, I mean, it's, ironic is not the right word, but it's quite amazing that the brand that your dad started, and then the brand that you started, were eventually now are both portfolio brands under Campbell's, right? I mean, I wonder, first of all, when you look at those brands, Cape Cod and Late July, do you feel connected to them? Do you still feel like they are part of you? Do you feel like, that's in my past, and they're doing their thing, and I've moved on? Like, when you see it in the store, does it mean anything to you?

• 1:25:53Speaker 01

  Well, I will say, a lot of times, Nyxie is displayed with Late July, which does give me an enormous amount of joy when I see that. You know, honestly, like, sometimes I'll just be missing my dad, you know, and I'll think something really good will happen. For anybody who's had a significant loss, like, it's always the good times, I think, when you, like, that's when I want to just call him up and tell him what happened. But if something good will happen, I'll be thinking about him, and I'll, you know, I spend a lot of time in grocery stores. People ask me, well, what are your hobbies? And, you know, I would say grocery store visits is probably my number one. And occasionally, I'll just walk down and I'll see, you know, Cape Cod chips and Late July. And, you know, it just makes me feel close to him, the fact that we both decided to do similar things with our lives. So, I mean, I do feel very connected to those brands still.

• 1:26:38Speaker 01

  And I will, I will be rooting for Late July and Cape Cod chips, you know, forever.

• 1:26:43Guy Raz?

  So, all right. When you think about where this is now, where you've gotten to, I mean, you've got, certainly, this business is growing, and it sounds like you're going to be doing this for a while because you love it. But when you think about that, you know, and the story that got you here, how much of it do you attribute to luck? I mean, how much do you think has to do with just the grind and the work you put in? And what do you think?

• 1:27:07Speaker 01

  I mean, I think it's a great question, because I think there's so many things that happened to me that were lucky. I mean, obviously, I was born into this family of entrepreneurs that supported me and taught me how to, you know, that this was even a possibility. But I think, once you go take that next step, and, like, why didn't it fail? That's where the luck starts to fizzle out and the hard work picks up. And in my case, the tenacity and just even in the face of, like, absolute dire circumstances, figuring a way out and, you know, making it work and never giving up. I mean, sure, there's some elements of luck in everything, but you have to be prepared

• 1:27:52Speaker 01

  for the sleepless nights and the long hours and the fact that no amount of luck is going to solve all your problems.

• 1:28:02Guy Raz?

  That's Nicole Bernard-Daz, founder of Late July Snacks and Nyxie Beverage Company. By the way, remember Nicole's story about the Newport Folk Festival? How her parents met there back in the 1960s, and then years later, Late July became a sponsor? When Nicole left the company in 2018, she figured that connection was over. Turns out, it wasn't. Because for the past few years, there's been another new sponsor at the festival, Nyxie Beverage Company. Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And as always, it's free. And if you're interested in insights, ideas, and lessons from some of the world's greatest

• 1:28:45Guy Raz?

  entrepreneurs, please do sign up for my newsletter at guyraz.com or on Substack. This episode was produced by Chris Messina with music composed by Ramtin Arbelui. It was edited by Neva Grant with research by Carla Estevez. Our audio engineer was Robert Rodriguez. Our production staff also includes Alex Chung, Casey Herman, J.C. Howard, Sam Paulson, Catherine Seifer, Carrie Thompson, John Isabella, and Elaine Coats. I'm Guy Raz, and you've been listening to How I Built This.