The Startup CPG Podcast

In this episode of the Startup CPG Podcast, host Daniel Scharff sits down with Adam O'Connor, founder of Smidge Beverage—a lightly boozy 2.5% ABV vodka soda—and Josh Fischer, VP of Product at Cin7, to explore how early-stage founders can build scalable operations systems that support growth without breaking as they scale.

Adam shares his journey launching Smidge Beverage, a premium low-alcohol vodka soda brand in Arizona, starting with self-distribution before transitioning to third-party distributors. With a finance and supply chain background, Adam knew from day one that having proper systems in place—particularly inventory management—would be critical to scaling efficiently. He implemented Cin7 pre-revenue, recognizing that without an end-to-end system to track inventory, lot codes, expiration dates, and invoicing, operations would quickly become unsustainable as the business grew.

Throughout the conversation, Adam discusses the realities of self-distribution in the alcohol industry (navigating three-tier systems, building retailer relationships, delivering and merchandising products himself), why he chose to invest in inventory management before his first production run, and how systems like Cin7 allowed him to focus on growing the business rather than manually tracking ingredients and managing spreadsheets. Josh provides the Cin7 perspective on what founders need to know about inventory management, why the transition from "brand builder" to "operations economist" typically happens around the 12-month mark, and how proper systems enable better inventory forecasting, sales channel expansion, and warehouse efficiency.

Whether you're launching a CPG brand, scaling self-distribution, or wondering when to implement proper back-office systems, this conversation offers honest lessons on why getting infrastructure right early matters, how to avoid common pitfalls when implementing inventory management software, and why founders who prioritize operations alongside brand-building are better positioned for sustainable growth.

Listen in as they discuss:
  • Adam's journey: finance background in wine and spirits, launching Smidge Beverage (2.35% ABV vodka soda)
  • Implementing Cin7 inventory management pre-revenue: why systems matter from day one
  • Self-distribution realities: navigating three-tier alcohol systems and building retailer relationships
  • When to transition from self-distribution to third-party distributors
  • The three stages of CPG growth: inventory forecasting, sales expansion, operations efficiency
  • Why founders shift from "brand builder" to "operations economist" around 12 months
  • Setting up SKUs, lot codes, expiration tracking, and integrations (QuickBooks, Shopify, EDI)
  • Tips for implementation: focused onboarding, outsource accounting, learn systematically
  • Key CPG tech stack: inventory management, accounting, Shopify/EDI

Episode Links:

Cin7:
Get 50% off your first 3 months: https://bit.ly/458bcCY

Smidge Beverage: 

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Show Links:
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  • Questions or comments about the episode? Email Daniel at podcast@startupcpg.com
  • Episode music by Super Fantastics



Creators and Guests

Host
Daniel Scharff
Founder/CEO, Startup CPG

What is The Startup CPG Podcast?

The top CPG podcast in the world, highlighting stories from founders, buyer spotlights, highly practical industry insights - all to give you a better chance at success.

Adam O'Connor
Pretty much most people when they taste it, they're surprised there's alcohol in it because we're using a super premium vodka. I know everyone says that, but a lot of producers use GNS, which is essentially Everclear. We're using an 80 proof vodka. So it's like this is vodka that you could essentially drink with a mixer. So again, the number one thing people say is this is so refreshing.

00:33
Josh Fischer
It all starts with the purchasing. Like once you can better understand what kind of investment you need to make in your inventory and what you need on the shelves for the next quarter or for the next six months, that's step number one, right? And then the growth, the actual sales and the building relationships with the buyers that it seems to me like that's the second stage of growth.

00:57
Daniel Scharff
Everybody. Ops. Ops. Ops. Ops. Ops. Ops. What's up everyone? Welcome today's podcast. I am Daniel. As you can tell, I'm very excited because today's episode is all about ops. Here at startup CPG we love these kind of topics because we think it's so important for early stage founders to understand what systems could really help them as they scale now in the future just get the understanding it's really low hanging fruit and can just help all of your operations work the right way. Today we've got Adam o'. Connor. He's the founder of Smidge Beverage. It's a lightly boozy 2.35% ABV vodka soda that is just cruising in Arizona. But he started doing self distribution. So because of his finance background, he wanted to make sure that he had inventory management taken care of.

01:41
Daniel Scharff
He would have a system in place so that as he scaled that's not what he had to worry about. He could worry about growing the business. So he implemented sin 7 actually pre revenue. So this is a full inventory and operations system that he got in place to help him as he would spend scale. We're also joined today by Josh, who is the VP of Product at SYN7 and both of them are going to talk a lot about what does that really mean to actually try to implement the system and what does it actually take? What are the benefits for doing it, how does it help your brand and what are a bunch of tips for actually doing it and things that both of them think that all brands out there should know. So a big thank you to sin 7.

02:18
Daniel Scharff
They have been an incredible partner for us in the community. It is a hugely recommended inventory management system and they actually offer a special discount off your first three months for this community. So check the show notes if you want to take advantage of that and. All right, everyone, let's get into it.

02:35
Adam O'Connor
Ops.

02:35
Daniel Scharff
Ops.

02:35
Adam O'Connor
Ops.

02:36
Daniel Scharff
Ops. Ops. Ops. All right, here we go. All right, Adam, Josh, welcome to the podcast. I'm very excited to have you guys here today. Before we rip into it, could we just start out with some quick intros, please? Adam, starting with you.

02:52
Adam O'Connor
Hello, I'm Adam o', Connor, founder of Smidge Beverage Company. It's a low alcohol vodka soda and we are Arizona based.

02:59
Daniel Scharff
All right, Josh, do you mind introducing yourself?

03:02
Josh Fischer
Yeah. So I'm Josh Fisher. I'm the VP of Product at Send7. Excited about this conversation today.

03:08
Daniel Scharff
All right, me too. Ops is just really one of my favorite topics, especially how do your OPS grow as your brand grows? Because I really want people to worry about that at the beginning so they can address it before everything just breaks, when hopefully they grow the way that they want to. So, Adam, I'd love to just start with you. Could you tell me more about Smidge Beverage? Like take us all the way back to the beginning and tell us the story.

03:33
Adam O'Connor
Yeah. So again, huge fan of startup cpg. I started listening to this podcast when I started to kind of dip my toe into starting a consumer goods brand. Huge fan, listened to dozen or more episodes and it really informational. And so any founders out there who are thinking of starting something, take a listen, dig through, there's some really good topics. So that's honestly where I like really just started books, podcasts and I was working in wine and spirits for a big wine producer previously before that, distribution, wine spirits distributor. So I kind of saw this gap in the marketplace. With the rise of NA category mocktails, I was kind of looking, why is no one really going after Ultra Low? That's sessionable and I'm talking sub 4%.

04:20
Adam O'Connor
So there's a couple things out there, but no one's really marketing towards it and really like that's their one identity. You've got some brands that are doing lower stuff, but that's not their true bread and butter. That's not what their identity is. So yeah, I just saw a gap and I was always looking for the lowest stuff. Low calorie. I'm into fitness and I just. No one's doing it. I want this. Turns out it got laid off for my full time job and so I took it as a sign. Let's do this thing. And yeah, haven't looked back, so been quite a wild ride.

04:51
Daniel Scharff
Alk for me is more complicated than non alk, especially because there are a Lot of rules about it that also when I think complicated, I also think expensive. And how do you actually then get the nerve to just go ahead and do it, especially having been laid off and just go for it and get the branding and get the product and really make a run for it in this kind of an environment?

05:13
Adam O'Connor
Yeah, I mean that's the one thing because it's three tier so you have to have a distributor, supplier or brand, distributor, retailer, customer. You can't typically just go straight to the retailer. Although there's a loophole, we can talk about that later, like what I did. But it's very time consuming. The laws are really different in each state. So that makes it pretty convoluted. Fortunately I was experience in Arizona where we launched and where we're in market now. So I kind of knew tricks to the trade a little bit, but a lot of chirping forward and figuring out as you go. But I got laid off. I liquidated my 401k and life savings and just started the business. And from there it's just kind of been a constant grind and just takes time to build something.

05:59
Adam O'Connor
I think a lot of folks that are in CPG if you're not celebrity backed or a celebrity for that matter, it takes a long time, it's a long game. It's like the ten year overnight success. So you've gotta really stick it out and believe in the process and just know that good things take time and a lot of the brands we know and love today didn't happen overnight.

06:19
Daniel Scharff
Okay, and so before we talk more about supply chain and how you set that up initially in your own distribution, can you just describe for anyone out there who has not had a smidge, could you just tell them about the product, what does it look like, what does it taste like, what's the brand all about?

06:36
Adam O'Connor
So we are all about low Al. So we're two and a half percent, 50 calories per can. It's essentially we just cut five and a half, five percent ABV in half. Right. So your typical seltzer, white claw, truly those are 5%. Your high noons, your Coors Light is in between 4 and a half percent. So I thought I want something lower. That's just going to take the edge off and you can drink a few or what they're doing now is called zebra striping where you're drinking an IPA or cocktail and then switching to something lower. So I thought this is great because no matter what the setting is, there's an Option for everyone. If you want to have non alk, great. If you want something light, great. If you want the heavy thing, heavy 7% IPA, great.

07:21
Adam O'Connor
It's just an incremental option for people and I think that's what a lot of beverage is. It's just what's the option? What's the trade off? And yeah, we're vodka based so we're not hard seltzer. And we've got three flavors. Orange blossom, strawberry, pineapple papaya and BlackBerry cucumber.

07:39
Daniel Scharff
Okay. And I know on your website it says lightly boozy vodka soda. And I'm very happy to admit I like the whole White Claw wave that happened. I actually don't like stuff that's too sweet. If I'm at a bar, I typically don't actually order the specialty cocktails for me. Often they can just be too complicated, too sweet. I'll go for kind of a one and one they call it, right. Like sort of a gin and tonic. Especially if I don't know the bar that well. I actually have a rule if I'm in a bar that has TVs, I won't order a cocktail because I feel like if they have TVs, they don't know how to make them good because they're too high volume. And it's going to be some pre mixed BS that I don't want.

08:15
Josh Fischer
So I'll just.

08:15
Daniel Scharff
Yeah, like. But oh, I mean if they have a good gin or vodka or something, I'll get something like that. But when it comes to the canned cocktails, yeah, I like the White Claw type approach. Let's say that probably they really pioneered in a lot of people's minds, including mine, where it's okay, it's a simpler drink. It really, it's not so flavorful. I would say like lightly flavored, but just kind of a one one type approach to it. But after I initially was kind of excited about those things, I found myself shying away from them a little bit. Because then you look at the label for I don't even remember specifically White Claw, but a lot of those kind of products. And you're like, what's in this? Because it just. First of all it just says alcohol like the. As an ingredient.

08:57
Daniel Scharff
Like I don't really know what kind of alcohol, which. Okay, I don't know. I was in a frat, we had like a bunch of very low quality alcohol that we would serve to people. Cause were on a tight budget. So like, I don't really know what's in this and then Natty Ice House, if you're just trying to be effective with your money, your apv. So I like that approach. But ultimately, like, yeah, I don't know, I just found also, like, a lot of times the flavors weren't exactly what I wanted. I just wanted that nice kind of clean, crisp taste that would feel refreshing. So I feel like your product is a really interesting proposition. Like slightly boozy vodka. The branding on it for me feels that way also.

09:35
Daniel Scharff
It's just like, oh, okay, this looks like a little higher quality and it's lower alcohol. This is the kind of thing I could see myself drinking a few of. Is that the kind of thing you're going for? Is that the experience you want people to imagine when they look at it?

09:47
Adam O'Connor
Yeah, I mean, pretty much most people, when they taste it, they're surprised there's alcohol in it because we're using a super premium vodka. I know everyone says that, but a lot of producers use GNS, which is essentially Everclear. We're using an 80 proof vodka. So it's like this is vodka that you could essentially drink with a mixer. So again, the number one thing people say is this is so refreshing. And working in wine and spirits for so long, I was pretty picky on things that I drink. And so I wanted it to taste really good. And again, taste is subjective. Right. But I mean, it's akin to a sparkling water with a little bit of booze. So some people actually use as a mixer, then they do a little vodka topper. But yeah, it's meant to be refreshing.

10:31
Adam O'Connor
It's meant to kind of wet your whistles, so to speak. And yeah, the number one question too that I get is it made with malt? So it's actually pretty cool that the consumer is starting to learn the difference between the malt versus spirit based.

10:44
Daniel Scharff
Yeah, I think you're right on. And I don't only ever want a refreshing beverage. I'll go for a dirty martini sometimes, and I like that. But when I reach for a can like this, I do typically hope that it will taste refreshing. So congrats to you for achieving that. Okay, so I do want to focus on a lot of the distribution and supply side part of this business because, yeah, it is complex and I know you have that background. So can you just tell me a little bit? Okay, like, as you start growing and you're getting these accounts, you start with self distribution. Can you tell me what you. What was that like? How did you imagine that as somebody who does know a little bit about this world. How did it work? Highlights, lowlights, all the good stuff.

11:21
Adam O'Connor
Yeah, absolutely. So getting a distributor is very hard, especially in alcohol. Four or five years ago distributors were looking to add brands to their portfolio. Now they're trying to get rid of brands because they're just getting so bloated. Their portfolio's getting bloated and. Right. It's kind of chicken or the egg. You've got to have distribution before you can get a distributor. So you've got to go out there, get placements, get a retailer. And so I didn't really have any other option. Like I didn't have any distributor that I could go to. I mean I could have tried my previous work that I worked at distributor. But they would say the same thing that every other distributor say you don't have enough distribution. Some of them require a large amount of pods, points of distribution in order to bring you on.

12:04
Adam O'Connor
Some of them are 200 plus. And so that gets, that's pretty tough starting out. So I just figured I'm going to get my wholesale license and I'm going to sell straight to the customer. So because I'm not actually producing it per se, I have a co manufacturer, I don't own an interest in production company that is actually producing products, so on and so forth. There's so many different license types in Arizona. But that was kind of the angle that my alcohol specific lawyer recommended. But yeah, I also knew that if I'm going to build this from the ground, you've got to learn every step along the way.

12:43
Adam O'Connor
And so that's where self distribution was so valuable because you're the one picking up the product from the warehouse, you're delivering it to the store, you're calling on the account, you're building a relationship with the buyer, you're making sure they have enough inventory, you're filling the shelf, you've got to build that respect to keep your brand on the shelf and get the buyer essentially to trust you and know that you're in it for the long haul because they see stuff come and go all the time and they're like oh great, another new product that I don't have room for. And so you've really kind of got to get their buy in by putting in the time.

13:15
Daniel Scharff
Okay, so you knew this at the beginning because you know what, the distributor world is like that to distribute they need places to distribute to. And I don't have all those yet because I also don't have a distributor. So it's a little circuitous but you knowing that are planning to do your own self distribution, you get the specific wholesaler's license that will allow you to do it. Probably a lot of people know about this three tier system that exists in alcohol, but it basically, as you mentioned, says like you can't be the one who produces the alcohol and then also goes and sells the alcohol. There are some rules out there, some people might call them arcane, I don't know. But it's very regulated about like who can sell what in alcohol, which protects the role of the brand, the distributor, the retailer.

13:59
Daniel Scharff
So you with the wholesaler, then you're okay, I can do some of my own self distribution here. So you must have really thought carefully about how to set that up so that it could be efficient, scalable for you. What were your plans at that point?

14:13
Adam O'Connor
Well, so, and that's kind of, I don't want to jump ahead, but that's kind of where sin 7 came in. I needed an end to end system because not only was I doing the assembly or the production run in SIN seven terms, the assembly, Josh knows that one. But it's gotta be able to do every single thing, like all the way to invoicing the end customer, generating the invoice so I can then upload it to my portal so I can get paid. Right. And so without having a system that can do that, it's really complicated. I mean there's no way. And not only that, but you've got to keep an eye on your inventory. QBO, QuickBooks Online, you can't keep track of like lot codes, serial expiration. So any of the like, first expiring, first out, first in, first out, you can't do that.

14:58
Adam O'Connor
So it really calls for a more robust system. And I'm a finance guy by trade. Like, I never held a sales role in any of my previous jobs. Supply chain finance, that's my bread and butter. And so I was always working on pretty antiquated systems at previous jobs. And I kind of said, all right, I want something that's good and I want something that I can use without ever having to change it. Because integrating to a new system, transitioning is very complicated, especially you get bigger. And so we looked at several options and we just landed on SIN seven. And so, yeah, if you don't know your numbers, you don't know your business. Marcus Lemonis said that. I mean, I'm a numbers guy, so that's the number one most important thing for me, feeling confident in the numbers.

15:40
Adam O'Connor
And you've got to have A good ERP system that flows through to your accounting.

15:44
Daniel Scharff
Okay, so that's pretty interesting, because inventory management system, it's not the kind of thing that most people, when they dream up their product in their kitchen or watching Shark Tank or wherever it occurs to them, they're like, yes, now I need a system right away to do all this stuff. Right? You're like dreaming of the branding and going out and selling it or doing E comm or demoing it, whatever you think of first. But then it is a really important infrastructure that lets you do all of those things. So I think the tendency probably for a lot of founders and Josh, you can correct me if I'm off on this, is like, they get excited, they just kind of go ahead and start stuff and maybe they're ordering ingredients and then at some point they realize, whoa, this is very time intensive.

16:26
Daniel Scharff
When I need to check how much I have of something or where it all is and tie up all the numbers. And every time I ask that kind of a question, everybody has to run around for a long time to answer kind of simple questions. And then at some point then they would know to implement an inventory management system. But, Adam, because you are a finance guy, you just kind of. You've seen this before, right? So then you decide, actually, I'm just going to go ahead and implement the inventory management system using SIN 7, like from the start, right? Basically you're like, let me just do this the right way. Do you feel like that is actually the right approach for everybody?

17:03
Daniel Scharff
Or like, because, okay, wow, like, you got a lot of confidence then that this is going to grow and you're going to be successful and you're going to do it on your terms the way you want to. But you know, they're also like, okay, you did it kind of before you even were assured that you would have the kind of scale and growth that would require it, which it ended up. But do you feel like that is the right approach for a lot of people? How do you think about it?

17:21
Adam O'Connor
Yeah, I mean, I think, look, people are going to disagree with me, but I think it's critical. I mean, if you don't feel confident in your numbers and be able to quickly grab them and know, like, what's on the balance sheet and what your cogs are like, you're going to be digging through spreadsheets. And I love Excel, but I don't want to use it for everything and just having it at your fingertips and just, I think the confidence, like, set it and forget it. Like, I Don't have to worry about it. I feel like it's almost like I have just everything I need. And I mean, we implemented since 7 before I even did my first production run. We were that far ahead because we just felt like we want to be confident. We spent a lot of time setting up the SKUs.

18:01
Adam O'Connor
I mean, we probably got more detail than we needed to be and we kind of dial it back a bit or a smidge, I should say. But we wanted it to be a little bit overkill at the start because you can always dial it back. It's harder to ramp it up, if that makes sense. So, yeah, I'd encourage founders get it right first because once you start selling, you're not going to have time to be digging into spreadsheets. You're going to be out in the market, especially if you're self distributed at the start. You're wearing a lot of hats and I don't have time to be fumbling through 70 tabs or whatever requires in order to figure out how much citric acid we use upon that first production run.

18:38
Daniel Scharff
Okay, so, Josh, from your seat at Syn7, you see a lot of companies, when they come to you guys, maybe they're already a mess or maybe they're like Adam and they started clean with you guys. What do you think is typical? What are the pros and the cons? Just what's common? What do you see?

18:53
Josh Fischer
Yeah, so I'm listening to Adam tell his story and he's clearly unique. I. I mean, you have a finance background and that puts you in a really strong position. Like the years that I've been doing this, what I've seen is the trend is around finance, when entrepreneurs really get serious about the numbers. That's when the business really starts to take off. And you started with that attitude. A lot of entrepreneurs, they focus on the branding and building the community, getting the product right, those are all very important things. But if you don't make that transformation from focusing on the brand to focusing on the operations and getting the numbers right, the growth will never come. And it sounds to me like you knew that from the beginning. So your strategy was like, let's get the foundation in place before I even start.

19:44
Josh Fischer
Like you said, before you even start selling the product. And that obviously that's worked out well for you. So I would love it if everybody did that. But it's not common.

19:52
Daniel Scharff
It's kind of funny because I feel like if you come from a finance background, you're just like, I'm just not going to do it that way. Like, that's not how I am. Like, I wouldn't do the business if it was just going to be a messy hodgepodge of manual Excel checks all the time and running around. Like, it's just not how you would do it. There are other founders who would start other ways with their other core skill sets and just kind of like, you got to be scrappy when you're an entrepreneur. Me personally, I will say honestly, like, if I ran a brand again, this is how I would start it. I would start with like the proper systems in place.

20:24
Daniel Scharff
Because if I'm going to do it, then I believe in it and I don't want to spend my time on manual ingredient tracking and all the messy stuff. And like, if you have a OPS person, you just have to ask them these questions and it takes them a day to come back and give you the answer. Like, I like systems where it makes sense. So Regardless, you use sin 7, which is very highly recommended to the community or anything else. I like a good system. Especially like, this is gonna be your focus, growing the brand this way. So I like to hear it. But yeah, definitely.

20:51
Daniel Scharff
So, Adam, let me come back to you just on some of the self distribution topic because, you know, I've talked to brands who have done it successfully and I think they did it because, yeah, they didn't have a distributor who would work with them. And they're like, yeah, we did it. It was really hard. And then we got to this point, I'm like, would you do it that way again? They're like, no, I wish I, like, I wanted to have a distributor. I wish we had one that would work with us and we had all the pods. So just. Can you tell me a little bit more about. Okay, what was that, like, early stages as you started growing? What was all of the. It's intensive to do it, right?

21:26
Adam O'Connor
It's.

21:27
Daniel Scharff
You're like running a distribution business. Just take us through it.

21:29
Adam O'Connor
Yeah, it was pretty much the same thing every day of the week. Going to pick products, drop it off, deliver merchandise it. Because again, you're in control of your own destiny. And people always told me this when I started. No one's going to care as much as you do. And so it's kind of up to you. And especially when you're just starting out, it's like, I wasn't going to hire someone right away. The distributor wasn't going to take me. So it was kind of. It was all on me to do it, which I think it was just you build a lot of respect for everyone along the supply chain of what it is that they do. It's not easy. I pretty much got to the point where I said, okay, I cannot grow my business unless I get this off of my plate.

22:09
Adam O'Connor
Now it's kind of just scaling, right? I mean, every step along the way, you've got to basically, what are the things that only I can do? So, you know, I didn't have time to go pitch new business and get new accounts because I'm trying to manage the existing. And so it ultimately just became, hey, this was a great way to start out, but I need to kind offload this. Granted, I think I jumped a little bit too quickly because I was still. Even with our most recent distributor, I was still in the stores, still calling on the account. I mean, and that's kind of the smoke and mirrors. Even though you've got a distributor, still falls onto the brand, the supplier, whatever terminology you want to use, it's up to you to kind of manage those things.

22:50
Adam O'Connor
But distributor, you're supposed to work synergistically with them. But yeah, ultimately at the start, you can't build a better relationship with the buyer unless you're doing it yourself. I built some really, and still today, strong relationships with these store managers, the buyers at the individual stores. And they have respect because most brands and suppliers aren't in the stores. They see their distributor rep, and that's about it. So I think it's just valuable to get that experience and kind of get your hands dirty, so to speak.

23:19
Daniel Scharff
Yeah, I feel like it almost can give you a pretty good running start. If you're in there, you're in all the accounts that you're in, you're talking to them, you're trying to get advantageous shelf space. You're really learning the mechanics of it. You have a very good eye to, if there are stock outs, how the product is doing on shelf, being able to form those relationships that hopefully help it turn a little bit better, which also helps you get additional accounts. But yeah, you're running a distribution business at that point, so it's very hard to work on the business when you're. That's like the definition of being in the business, right? So getting new accounts. But do you think, looking back, I mean, it seems like that was a great way for you to start, though?

23:55
Daniel Scharff
Even though it was very time intensive to do it that way, it really did give you those pods that you would need then to move into the next phase of the business. What do you think, was it definitely the right way to do it for you?

24:05
Adam O'Connor
Yeah, a hundred percent. And this may or may not be alarming, but my relative to how many retail stores were in and accounts, my sales were actually better when I was self distributed because I was in stores so much more frequently. And like it was me, I'm squeezing out those few more cases from the buyer because it's me and I'm pushing. Right. So it's been interesting to see. And it's not like what people think, oh, you're with a big distributor, you're probably selling way more. And it's like, well, not really. Because it's not their baby, they're not trying to build this brand and all that. So yes, I would do it the same way again. And also, like I said, I'm a finance guy.

24:43
Adam O'Connor
I needed to kind of get my feet wet in the sales and that side of things to kind of learn that sort of. So again, 10 out of 10 would recommend it. But it was a little bit of a wake up call when you're, it's windshield time Monday through Friday, you're hitting accounts and then you're doing demos in stores. So you're essentially working every day of the week. And then you kind of realize this is not sustainable for one person. And I can't cover a giant territory.

25:08
Daniel Scharff
It's actually not surprising to me at all that you'd be in the stores having a big impact on it. Because you're there, you can do demos, support the business. And also because the store owners and store employees, they get attached to you and they like you. And they're. When somebody asks what's cool, they're like, well, this guy. Yeah, this is cool. And I also feel like, I mean, I know a lot of people choose to drink less, which works in your favor, or not at all these days. But like, I feel like having an ALK brand is like pretty cool. It's like having a band. Like, people like to know people who have ALK brands. Like, it's a cool thing. And so I guess one question that I have for you is here's a stereotype.

25:43
Daniel Scharff
Finance guys, typically, I wouldn't be like, hey, let's go run demos, okay? Get the finance guy to go out there and run demo. But you know, obviously you've done and you're successful at it. Was that natural to you or do you feel like you had to move out of your comfort zone?

25:56
Adam O'Connor
Yeah, so funny thing, I actually, I did have someone I was working for me at early on and salesperson the whole life. And they actually said to me, like, you're not a salesperson. You don't understand what it takes. And I was like, whoa. I mean, I'm like, okay. But they could tell you make it, really. When you're the founder, you've got to do everything. Fortunately, I have the finance ops background, but the sales was. You have no idea. Walking into an account, never doing a demo before. I mean, it's. I was scared out of my mind, if I'm being honest. Like, I don't know what the heck I'm doing. I was so nervous that first demo I did. Now I've done probably over 150 in the past year. And so. And now it's like second nature.

26:31
Adam O'Connor
But it's funny, I didn't think I'd be able to do sales, but when it's your something you create and you're passionate about and it's more than just like, oh, I'm doing this to make money or whatever, it's like you can see the look on people's face and like, oh, this is so awesome. I literally had someone a couple days ago that said, I was just talking about, why isn't anyone creating a low alcohol drink? Like, I want to do that. And then they walk up to my table and they're like, they're in shock because they're like, wait, what? And then they're raving about the product. So that's pretty special. And it's something that you've created and you see someone that's like, they wanted to create it or like they want it as part of their fridge, so to speak. So that's rewarding.

27:10
Adam O'Connor
But yeah, it's definitely not the get rich quick type of business. So I think we all know that when you're in cpg, but there's nothing else like it. I mean, what the hard stuff actually makes it so rewarding.

27:21
Daniel Scharff
What was it like the first couple demos that you did? Were you like, looking at someone kind of like fear in your eyes? Like, are you going to not even like this? Is this horrible? Am I foolish for doing this? And then the wave of relief when they like it.

27:34
Adam O'Connor
Well, yeah. And I think the biggest adjustment was, again, not everyone is going to be my customer. Not everyone wants a low alcohol product. I mean, even today, people, I need more alcohol. What's the point? I don't get it. Might as well just not drink. It's just like nonstop with that stuff. And initially I kind of like got offended. Now I'm Just like, yeah, that's cool, I get it. You don't have to get it. That's fine. So I think I took it more personal starting out or like, if they just didn't like a particular flavor. I mean, again, you get negative feedback. Obviously, I'm biased, but generally I'd say 95% of people think it's amazing. Tastes great. But yeah, it's just kind of. You have to kind of separate yourself from the brand. And not everyone's going to like your product.

28:17
Adam O'Connor
Rather have a thousand people love me than a hundred thousand people sort of like me or whatever the numbers are. So you've got to be able to just kind of separate yourself from it and not take it personal.

28:28
Daniel Scharff
So I think, Adam, that you are more mature than I am, because when I was demoing my product, that 5% that didn't like it, I'd be like, no, you're wrong. You do like it. And if you don't, then you're wrong for not liking it. You just don't know you like it or you can't admit it. I can't actually let those go. And I'm like, no, everyone's going to like it.

28:48
Adam O'Connor
I'm right there with you. When I started out like, that was. It's taking me a while. You kind of got to develop that kind of thick skin to kind of say, okay, well, whatever. I know I've got other people that are going to walk up and want to buy it, but it's hard. It's a skill.

28:59
Daniel Scharff
I like it. Okay, so Josh, like, Adam's probably your dream type of customer for the early stage, right? Later stage companies, they're better resource. They might have dedicated finance and ops people who they're just used to and eager to get inventory management on board so that it makes all of their jobs easier. The early stage, like, probably there are a lot of people who know they need it, but yeah, maybe they are more sales and marketing oriented as people and less proficient and ready to adapt something like an inventory management software. What do you typically see from those kind of early stage founders? How do you get them over the hurdle of like, no, we'll. We'll get you there, we'll get the system implemented. You can do it.

29:41
Josh Fischer
You know those other types of businesses, the ones that start out focused on marketing and brand, and then they go through that same difficult process that you went through, Adam, but their process is a little bit different because they get to the point where they're selling so much that there's all this operations, they actually have to fulfill the orders and then that isn't something they've spent a lot of time focused on the logistics and all the different details that they need to concentrate on all the numbers that they need to understand. So it's an education process. Congratulations, you've made it to this point where you're actually ready for this back office system to help you get organized.

30:18
Josh Fischer
But there's a lot that they have to learn that it sounds like it came by default with you, Adam, but there's a lot of information that they have to learn and get up to speed. Otherwise the system just, it can feel overwhelming to them. A little bit more complicated than spreadsheets. And a lot of times what we find is just sending them resources or pointing them to podcasts like this or pointing them to online like lectures from supply chain experts to help them start to understand. Like this is how these products flow and this is the process that we're going to go through. And then this is why I need to keep track of all these specific details.

30:54
Josh Fischer
And a couple months of that, it eventually clicks and usually it's after the 12 month mark, that's when it all is running like a well oiled machine and they come back, they're like, okay, everything that you said now makes sense to me. I'm glad that I'm here now. And then typically they're send seven customers for years after that just because the machine's running now, they're good to go.

31:15
Daniel Scharff
Okay, so Josh, when the machine is running, tell me and everybody out there like how should inventory management work for the company? Like what are all the things that at a typical company like smidge or anyone's like when it's running efficiently, here's what it actually does for you. Like take me through each of the steps.

31:32
Josh Fischer
One of the first challenges that customers run into is around the inventory forecasting. So they spend all this time like building up their brand and trying to sell it. They've built this network of buyers, they have those relationships now. They're ready to sell, they're getting into that rhythm and now purchases are coming in, they're filling up the shelves, they're, they have sales going out the door. But understanding like what is it going to look like in six months from now and what kind of inventory should I be building up? Should like usually I'm buying at this level. How do I know when I start buying at higher levels?

32:06
Josh Fischer
Maybe I just go out and buy as much as I possibly can now and hope that I can sell it and then they do that, they get into a cash flow situation that really tightens things up. And now they have other problems. They can't advertise like they used to, or maybe they can't afford those operations people that they needed. So it all starts with the purchasing. Like, once you can better understand what kind of investment you need to make in your inventory and what you need on the shelves for the next quarter or for the next six months, that's step number one.

32:35
Adam O'Connor
Right?

32:36
Josh Fischer
And then the growth, the actual sales and the building relationships with the buyers that it seems to me like that's the second stage of growth because there's only so much that you, as the founder can handle. And then you need to slowly start thinking about when is it time for me to start adding additional resources that are going to go out and spread this network out for me? Maybe we're moving into new regions or maybe we're moving into new markets. So now you have the inventory forecasting figured out and now you are starting to think about your sales channels and how to widen those. And then eventually you get to a third stage where you start thinking about operations efficiency. Like, how can we get the warehouse running in such a well?

33:18
Josh Fischer
How can we get it tuned so that everything is flowing through this warehouse but costing me the least amount of money? So whether it's the actual cost of shipping or the cost of resources or actually how the warehouse is laid out, like understanding your goods so that you know that you can pack up common orders in the fastest way possible, how many orders you can actually get out of the warehouse on a daily basis, what kinds of resources you need in order to keep that pace. These are the things that you grow into eventually. And that's what I mean. Like after 12, 24 months, you actually start to talk about your business in a different language.

33:56
Josh Fischer
Like, there's the stage of business where you talk about it from a brand perspective, and then there's the stage where you talk about it from the perspective of an economist. And that's like the next archetype that I think you. Everybody's growing towards.

34:08
Daniel Scharff
Okay, I think that's a really good explanation. And also, I mean, just to be clear, it does require good inputs for you to understand that inventory buildup you need to have. It's going to depend a lot on you putting a good forecast in there, right? Which you have to like sit there and actually do that and do the bottoms up forecasts using historical info and also input from your sales team to give it a good guess. Right. And transpose it based off shipping windows, those kind of stuff like really understand what is the volume happening here.

34:37
Daniel Scharff
And then because of all the information you're also entering into the system about your SKUs and all of the details of it and the ingredients in it and it really can do a great job of translating all of that into what you need to buy and when and also understanding the movement of all of that product through the system because you have this inventory management system just pulling all that information and flowing the right way. How Josh talks about it, is that how you think about it? Like a lot of times brands will think about it a little bit differently than like the actual person who designs and builds the software. But is that pretty much like how you think about inventory management?

35:10
Adam O'Connor
Well when he said like around 12 months like that just that clicked because it's been what we started it and oh I guess we started since seven and gosh, it was like last spring. It's not to say we didn't have any hiccups on the along the way. I mean it's not the most difficult system but I mean you do need to spend time in it. Like any system you've got to learn it. And now it's like I know like the back of my hand and also been very fortunate to have great support from sin7 walking through, learning things and also the accounting firm that they partner with, I think it was account fully announced belay they're actually my accounting group and they are like amazing.

35:45
Adam O'Connor
So having someone that can help with things like that too is really critical because I can't get into the weeds and I don't really want to either. But yeah, I think once you move from hey, we're building a brand like it's time for me to kind of like step back a bit from like being the face of it. I'm trying to figure out how can we improve our cost of goods sold, how can we operate more efficiently. Like hey this is what I need to buy. This is what we are sitting on inventory. This is when I need it by the beverage. The minimums are quite large to produce so you really got to be smart about when you're doing it. You're planning and our forecast, it's depletion based, it's not shipment.

36:24
Adam O'Connor
So for those that I'm going based on our velocity in each you know, account we're in stores and then backing into a number and that's how I build my forecast. It's not based on how much I'm shipped to the distributor? Because you could ship three pallets to the distributor in another state and it could be sitting there for however many months till it sells through. Right. So. So you've got to get really detailed. And then thing about syn7 is you can trap those lot codes, the serial and because we're using ingredients that do expire, you've got to be able to do that and you've got to be able to say, hey, what's my shrinkage? You know, what do I have to write off? So on and so forth. And really without system like SYN7, you can't do that. So yeah, I love it.

37:03
Adam O'Connor
I tell everyone about it. I mean it's just again, you've got to kind of bite the bullet to grow. And that's kind of the way I.

37:08
Daniel Scharff
See it seems to me. Tell me if you think I'm wrong on this one, Adam, but you can get pretty far in this industry with some pretty good systems. And I think some of the key ones we talk about, obviously inventory management, you have that set up, you're good to go. The accounting that you've talked about, you know, whether you're in QuickBooks or Xero or whatever, and maybe you decide to have an accounting partner come on to do that stuff for you. And then obviously like Shopify or one of those other products, especially if you're focused on D2C or like EDI, if you're really focused on retail, obviously all that stuff basically, like those ones for me are kind of the top ones that I think about first to like really get back office to the point where I can scale with it.

37:49
Daniel Scharff
Do you feel, is that how you think about top kind of like tech stack stuff or back office scaling or anything else that you would put on that top tier.

37:56
Adam O'Connor
I mean what's interesting is we kind of, because were doing self distribution, we actually pulled off some of the features that we started with. Sorry Josh. But we had the B2B portal which was amazing. I was able to have customers, I would send them the link, log in and they would go put in their order and then I would, it would flow through to me and then a process. So I'm not having to do all the clicks, the keystrokes to get there. So that was an amazing feature like for a non out brand, like or traditional CPG that's on alcohol, where you're not or where you want to have a portal where people can purchase from. Like that is an amazing feature that we paid for. But eventually, now that we're not self distributed, we don't need it.

38:36
Adam O'Connor
But I think you've got to just find what works for you. And again, like with sin 7, like it's all at cart where you can add on the different integrations that they have, which is really nice feature because you don't need to, they don't make you get everything right. And if you're like, oh shoot, I need to add this because we've grown, it's available. So shopify whatever the other ones are.

38:55
Josh Fischer
Yeah.

38:55
Daniel Scharff
What do you think, Josh? Should I get kind of like key tech stack right for you or anything you would add into that where you really. Because I know you guys have so many integration partners as well.

39:04
Josh Fischer
Yeah, I think it depends on what kind of industry you're in, but I think your tech stack is ideal. And then there are some businesses that want to look at more advanced CRM systems. Maybe you have a group of sales team members and they're managing complex sales stages or they have complex quotes, whatever it may be. But no, I think you got it right. And I think that tech stack can get you a long ways. Like once that's up and running and you got everything tuned and you actually learn the system. What Adam said about working with accountfully and having a partner, I think it's really critical because number one, you have an outside source that's able to look at your business through fresh eyes and give you advice. That's really important.

39:45
Josh Fischer
But at the same time, they've been through this hundreds of times before. So what's new to you is old news for them and they can quickly get you up to speed and a lot of times they will point out things that you wouldn't have figured out on your own for months, possibly years. And that can save you a lot of time and money down the road. So tech stack's really important. I also think just finding yourself a consultant that's been through it before and helping you get that baseline set up is really important.

40:12
Daniel Scharff
Okay, cool. So Adam, now you guys have grown shifted to having distribution partners. Can you just talk about what that has done for the business? And then also let's return to like, okay, how does that impact this back office stuff in ops and what are the impacts of scaling that as you move into having a third party distribution partner?

40:31
Adam O'Connor
Yeah, so I went from doing, you know, 20 to 25 sales order invoices a month where I'm actually the one processing, uploading them to our payment portal to get paid. Arizona's a cod Cash on delivery state, so you get paid right away. Now I'm processing, you know, one to two invoices every, you know, one to two months. Again, we're only in one state, one distributor. So they're not ordering every single day. They're buying it by the pallet, whereas I was selling it by the case. So it's less time in the system now as far as like on the sales side, but as far as like purchasing and demand planning for inventory, it's like I can go in, adjust a PO if I need. Oh, you've got to add this press fee for cartons or whatever. You can go in there and add it.

41:13
Adam O'Connor
But yeah, as far as like changing to a bigger distributor, it's a little bit more hands off now. But I know that when we do go into other states, it's going to be right back to where thank goodness I have this because it's just so easy. Like just add a customer in there, put in the what they want to buy, change the price based on what you work out on your pricing structure with them and then the rest is you're done. You send them the invoice, you get paid. I mean it's great. It's just less time that I have to spend on. I sent an invoice or a PO to one of my vendors and they're like, you're a startup. Why does your PO look so professional?

41:47
Adam O'Connor
Normally we just get like an email for a PO and I'm like, since Evan, you know, so it's just kind of funny. Like it makes this look bigger than we are. It's kind of like, that's kind of cool to just know that we'll be with the system for years and I'm excited to scale with it. So growth is good, but again, starting from a strong foundation is critical.

42:04
Daniel Scharff
I love it. Okay, so as we're kind of wrapping up here, I wonder, Adam, if you have any tips from being a pro sin 7 inventory management system user, Anything you would just tell brands who are on their journey using it, like, oh yeah, definitely. Like this feature is amazing. I use this all the time. Or this is kind of a insider tip for getting the most out of the system. Anything that you can think of.

42:28
Adam O'Connor
I would say definitely pay for the focused onboarding at the start because you want to get stuff set up correctly. It's worth the investment, it's worth the time. Don't be afraid to ask support for help and get what you need because they will spend Time with you and make sure that your system is set up and running smoothly. Like Josh said, agreeing with, find someone that you can outsource the accounting because, again, you want those fresh eyes on it. Like he said, you want to have someone that's seen it before a bunch of times, and they also know the system really well, too, which helps. And so, yeah, I think I would just say also, you've got to spend the time in it to be able to, you know how to use it.

43:05
Adam O'Connor
So you can't just get the system, think, oh, I got this great system. It's gonna do everything for me. You've gotta put in the time. But to learn it just like anything else, gotta do the time. Just like going out in the market and selling your product, you gotta put in the time and effort to. To learn it. Now it's like you flip through it and it's easy.

43:21
Daniel Scharff
All right, Josh, same question to you. I know as the VP of product, probably there's a lot of stuff that you hold very near and dear to your heart, but any simple insider tip that you would give to everybody out.

43:33
Josh Fischer
There, I agree with what Adam's saying. It takes patience. One of the challenges that we face is that a lot of these merchants, they spin up Shopify sites, and you can learn how to spin up a Shopify site anywhere. You can use YouTube. It'll teach you everything you need to know, and within two weeks, you're selling products online. But when it comes to back office systems, it's a completely different ballgame. It's not as easy as Facebook or an app that you download to your phone. There's a lot of details, so you got to take that extra time. The other thing I would say is don't try to bite off everything at once.

44:05
Josh Fischer
So spend time getting your head wrapped around a very specific area until you inherently understand that logic, and then move on to the next thing, get your head wrapped around that logic. Eventually all of those pieces will come together, and then you'll be able to visualize how this information flows and why these different stages and steps are important. And when you get to that point, you understand the language at that time, and that's really when you can start ramping up and scaling. I love it.

44:33
Daniel Scharff
And I also just encourage everybody to, if you're going to use SYN7 and probably any solution, like, reach out to the team and ask them questions because they actually all are very passionate about this and they will help you. I actually have been there in person when one of my friends who is running a business that has now surpassed a hundred million in revenue. And they're very heavy D2C. And they came and asked Josh a question about this. They're like, hey, I like, we're having this one issue because we get so many orders that QuickBooks, our integration, it's like really hard for QuickBooks to keep up with all of the transactions that we're processing because of all the D2C. He's like, just gave them a really simple solution for it. Like, yeah, if you checked out QuickBooks plus, because if you upgrade that, it's.

45:13
Adam O'Connor
Going to be a lot.

45:13
Daniel Scharff
And they're like, whoa. Because, I mean, they're planning on just riding it out, like all of this crazy growth that they have with sin 7. And it's just really cool that they can turn to your team as a resource for all of those kind of questions, because I've been to your guys's conference and there's a whole suite of people there who have integrations with sin7 based off of specific needs of the business. So it is very cool for them to have your team as a resource. So, Josh, on that note, is there any tips for you would give to people for, like, how to interact best with the syn7 team?

45:42
Josh Fischer
I would say we're happy to help, but the other thing too is ideas. So as you're going through the system, I constantly get great ideas from our customers. Like, I wish you just had a field here, or I wish there was a dropdown that let me filter this information. And that's invaluable to us because it helps us understand what the world looks like from your perspective. And we try to fit as much of that into the backlog as we can. The ideas that aren't unique to one specific customers, but the ones like, oh, yeah, that totally makes sense, that would help hundreds of customers. So the questions can come to us and we can help as much as possible. But at the same time, feel free to send those ideas over because we're all ears.

46:20
Daniel Scharff
All right, I love it. Cool. Adam, as we're wrapping up here, then can you also just give any tips for how people can best support systems smidge and your journey?

46:29
Adam O'Connor
Yeah. So if you're not in Arizona, sorry, you're not gonna be able to get it. We don't ship products interstate, so. But if you're in Arizona, we're in AJ's fine foods, total wine bashes. And then we've got a new retailer coming in January, but that's kind of a secret right now. But yeah, follow us on Instagram, smidge beverage and yeah, thanks so much for having me.

46:50
Daniel Scharff
All right, thank you guys. And I just would encourage anybody, if you're interested to chat with a sin7team, check the show notes because we have a cool special offer with where you can get a nice deal off your first three months of SIN seven core and all of the cool stuff in there. We've talked about it a lot here, but I mean, just good for everyone to understand, like it can do all this stuff that you need to do, from setting up all of your skus in it to when you receive the orders and then have to allocate the inventory from your warehouse or from the coman all of these things, it just, it all flows together and you'll know where all your stuff is, where it's going instead of having to do all of that stuff the very manual way.

47:32
Daniel Scharff
So just so many benefits. So definitely reach out and talk to the team there if you're interested to learn more about it, which I really encourage because I like a good back office, as we said here today. So thank you very much. Since Evan, we really appreciate all of the partnership from you guys, which came about just because you guys were so heavily recommended from the community that I used it at my last brand and we've got so many happy users out there. So thank you guys. Adam, thank you so much. It's really helpful to have a brand translate that whole thing for everybody out there, especially someone who has as much experience as you do. So thank you both and I hope everyone enjoyed this one. We'll see you again next week.

48:12
Daniel Scharff
All right, everybody, thank you so much for listening to our podcast. If you loved it, I would so appreciate it if you could leave us a review. You could do it right now. If you're an Apple podcast, you can scroll to the bottom of our Startup Search CPG podcast page and click on Write a review. Leave your company name in there. I will try to read it out. If you're in Spotify, you can click on about and then the star rating icon. If you are a service provider that would like to appear on the Startup CPG podcast, you can email us@partnershipstartupcpg.com lastly, if you found yourself grooving along to the music it is My Band, you can visit our website and listen to more. It is superfantastics. Com. Thank you everybody. See you next time.