#227 - Operations Ask-Me-Anything with Jamie Valenti-Jordan

In this episode of the Startup CPG Podcast, Daniel Scharff speaks with Jamie Valenti-Jordan, CEO of Catapult Commercialization Services, a leader in food and beverage product development, scale-up, and manufacturing strategy. Jamie brings decades of experience guiding brands from concept to commercialization, and a mission-driven focus on helping innovators build sustainable food systems for a rapidly growing population.

Throughout the conversation, Jamie breaks down the realities of bringing products to market—from choosing the right product developer to navigating the complexities of frozen logistics, ingredient sourcing, and co-manufacturing partnerships. He offers clear, pragmatic frameworks for evaluating partners, managing risk, and building cost-effective operations, while emphasizing the importance of communication, collaboration, and long-term relationship building.

Daniel and Jamie also explore the structural challenges early-stage brands face when entering manufacturing environments not optimized for small batches, and why founders must understand the economics and constraints of their partners to negotiate effectively and scale responsibly.

Listen in as they discuss:

• How to identify and evaluate independent product developers
• Challenges and cost drivers in frozen DTC logistics
• Where and how emerging brands can source core ingredients
• Sampling strategies and pilot runs for early-stage commercialization
• The operational realities behind low minimum order quantities
• How co-manufacturers structure their costs and capacity planning
• Best practices for visiting facilities and developing working relationships
• Key considerations when reviewing co-packer contracts
• The role of transparency, expectations, and shared accountability
  
  

Episode Links
Website: https://www.catapultserv.com/
LinkedIn: https://www.linkedin.com/in/fvmh97c/ 

Product Developer Database Submissions: https://bit.ly/productdevelopers

epg contact: [e-mail], mention Startup CPG

Join the Startup CPG Slack: startupcpg.com

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Show Links:

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• Questions or comments about the episode? Email Daniel at [e-mail]
• 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.

Jamie Valenti-Jordan
Larger basket orders will allow you to buy that dry ice at a cost effective way. Likewise, your larger Styrofoam container is more cost effective when your purchase size is larger. So without getting into thermodynamics of why it's going to be a continuous issue with direct to consumer frozen, this is why we try to work frozen through the retail channel and we've got really good supply chains to support that.

00:39
Daniel Scharff
Hey ops people, if you got a problem, yo, we'll solve it. Today I got Jamie Valenti Jordan on the pod, one of the deepest ops heads out there. I've worked with him personally. So much love featuring him over and over on the podcast because he just has all of the knowledge. You cannot stump this guy. So I've picked up five of the most common questions from our huge slack channel lately and teed them up for him. I can't wait for you to hear all about it. All right, here we go. All right, everybody, welcome to the Ask me anything. Got a problem? I'll help in a pickle. Let me know if you're stuck. We're here. Don't you know you can ask me anything, but actually you're going to ask Jamie everything.

01:24
Daniel Scharff
Jamie, welcome to the I try to have a song every time you come on. What do you think?

01:29
Jamie Valenti-Jordan
I love it. Let's keep this tradition going, all right. Especially the don't you know it resonates with my Midwest self now.

01:36
Daniel Scharff
All right, perfect. I thought you were going to say let's just stick to business, but I'm glad that it went the other way. All right, so I am really happy to have Jamie back here. We've run this one before and in my mind this is just an excellent way to in rapid fire extract a lot of that juicy knowledge from Jamie's years and years of putting out ops fires for so many brands out there. So let's just hit it first. Jamie, requisite intro. Can you just let everyone know what you're all about, what you do?

02:05
Jamie Valenti-Jordan
Oh my gosh, all the hats I wear. Okay, so first of all, thanks for having me on, Daniel. Jamie Valenti Jordan, CEO of Catapult Commercialization Services. I run a team of about 80 people spread across the US doing all sorts of fun stuff on the areas of product development and commercialization of products through manufacturing sites, whether that's co main or building new ones all the way through to starting those trucks running. So in addition, I also wear a hat over at the Food Finance Institute, which is a portion of the University of Wisconsin where My grant funded position is there specifically to help people grow their businesses in the food industry from, let's say farmer's market on up.

02:47
Jamie Valenti-Jordan
So we work with folks to get them into retail distribution or food service distribution and get them into that sweet spot of about eight figures where you can start paying your founder some actual salary. So yeah, always happy to take on any sort of problems that people have and help them scale in a way in which they're going to be successful in the long run.

03:06
Daniel Scharff
And this state alliance that you have for Wisconsin, do you just only want Wisconsin brands to succeed and just crush all those Michigander brands and Indiana brands or do you really root for everybody but extra hard for Wisconsin brands?

03:21
Jamie Valenti-Jordan
Absolutely. The food industry is cutthroat. We want to take on every other. No, not at all. Of course we want to help everybody. Right. This industry is so small. We all know each other to some extent. So shout out to all my other colleagues on the OPS Channel, great to see you guys. But also be there to help. I mean, at the end of the day, my personal mission is built around the World Health Organization's report that came out a few years ago that said by 2050 we're going to have more people on the planet and then we have the ability to feed with our food systems as they exist. That's the year my son is going to turn 35.

03:53
Jamie Valenti-Jordan
And so I'm really taking this on as a personal mission to figure out how to get as much innovation through the commercialization process and into the marketplace so that it can have an impact on the industry, so that the next wave of innovation can take place. My goal in all this, my personal mission is to make sure my son doesn't have to deal with mass starvation in his lifetime. I love that.

04:15
Daniel Scharff
And way to take my stupid joke and turn it into something very beautiful. So thank you for that also.

04:20
Jamie Valenti-Jordan
That's what we do here.

04:21
Daniel Scharff
Let's get into it, my friend. All right, I have got a bunch of really juicy topics for us today. We're going to be talking through formulating products, shipping products, sourcing ingredients, all the good stuff. So let me just hit you with the first one right away. Okay. So Jamie, the first question that I have for you is from Matt in the channel. And Matt asked, does anyone know any independent product developers or culinary experts? This is a very common question in the slack. People ask it all the time. They are trying to either improve a product that they have or create a new product line or get their product right off the ground and they're wondering who out there in this world is best suited to help them do that. Probably within their budget constraints, stuff like that.

05:04
Daniel Scharff
So, Jamie, when you talk to brands who are trying to find the person to create the product for them, what do you tell them?

05:09
Jamie Valenti-Jordan
Sure. I mean, when you're making your first product, it's incredibly challenging to get somebody to take what is effectively your vision, your mission, your gold standard, and try to scale that up. So there's a whole bunch of reasons why you want to work with a product developer who can understand not only what is your goal with your product, but what your approach is with your consumer. So I would recommend definitely reach out to the Slack channel here, but you need to give a little bit of background into what you're trying to target. Those that work in beverage may not be as great at making, let's say, a frozen croissant. Right. It's a completely different branch of technology. So give a little bit of introduction into kind of like what your product category is going to be so that the right people can be recommended.

05:54
Jamie Valenti-Jordan
I'll tell you, as a food scientist, we all more or less know each other and we're not going to take on projects that we're necessarily ill equipped to handle if we've been around the block once or twice. So what I mean by that is get recommendations from other product developers that may not specialize in your area because those folks will know who's good. Right. Who's going to be efficient with your time and by their extension, your money. Right. So if you're looking for someone who's an independent product developer, just make sure that they've got some background in the area that you're in so that you can vet them and make them a great part of your team going forward. Certainly that kind of contract basis is known and understood. And then definitely they can work with you all the way through the commercialization process.

06:39
Jamie Valenti-Jordan
Just one, watch out. A lot of product developers, especially younger product developers, no offense, I was one, don't have as much experience in a production setting and production facility. So scale up can be more of a challenge. So if that's going to be your approach is to work with someone who's younger, that's great. Just bring on somebody else maybe later on to work with them when it comes time to have the rubber, meet the road and scale things up for commercialization. So it's not a dig on younger developers. Hey, I was one. I get it. I still look like one. I get it. The goal in all of this is to get the product out the door the way that we want people to experience it. And so that is a handful of important considerations there.

07:21
Daniel Scharff
I like that a lot. And I don't know why that never actually occurred to me in that way. Of course, like, ask the people who really know. Ask the other food scientists, because these communities exist. Like, if you go to ift, something like that, it is all the food scientists there, they've trained there, they present their papers there, they all know each other. That is like too obvious of answer. That had never occurred to me. That's a really good one.

07:43
Jamie Valenti-Jordan
I'll take you one step further. There's even local chapters of ift, which is the Institute of Food Technologists. And so wherever you are in the US there's likely a local chapter within about a hundred miles of you where they get together on at least a quarterly basis, kind of hang out and chat with each other. You can go interview a whole bunch of product developers all at once, and they'll probably just walk you up to the right person and say, here, you want to work with this person. They're great. And so this exists. You can find them. If you need some more direction than that, reach out to us.

08:12
Daniel Scharff
I love it. That sounds like great way to go. I'll also let everyone know this has not really been announced anywhere yet, except right here, which is startup. CPG is creating the first ever big database of all of those freelance product developers. Because so many people ask in the Slack for help creating products, we thought, why don't we just create one master list? If you are a freelance product developer or one of the companies that does this for a living, you could enter your details in this spreadsheet which we will release out to everybody for free. And it will have all of the cool info, like what are the product categories that they specialize in? What are their capabilities? Where are they located? Because sometimes it's nice to go shoulder to shoulder with somebody as they're making your dream come true.

08:49
Daniel Scharff
So if you check the show notes, we'll have a link to where you could actually submit your entry. If you are one of these people that brands need to know about and that's what we want. All the information out there. And then the next time we do this podcast, that'll just be the answer. I just look at that database. Perfect. All right, another question here from the Slack that is asked all the time. So somebody says, I have been running the numbers and I'm getting stuck on shipping. I've got a frozen product and it has to stay that way during transit. The costs are adding up fast. Doing it in house is really expensive. You need dry ice packs, insulation, all that stuff. But third party shipping looks even worse. How do I make money off doing this? What should I do? Jamie?

09:25
Jamie Valenti-Jordan
Yeah, that's a tough one. We get this question all the time in the slack and so I will jump straight to answer here. There's one significant group that's figured out how to do it and they've been doing it for decades. That's Omaha Steaks. And one of the ways that they do that is they make such a significantly large amount of product in the order necessary for them to deliver it that they can put all the dry ice and all the Styrofoam that they need to into that large order to make it cost effective. The reason why it's so expensive is the amount of time that it takes through a supply chain for the product to get to the consumer. The consumer only receives it when they pick it up off the doorstep, not when the shipper says that it's supposed to arrive.

10:05
Jamie Valenti-Jordan
So skimming over all of that, the amount of time that it has to sit there requires a certain amount of dry ice. Larger basket orders will allow you to buy that dry ice at a cost effective way. Likewise, your larger Styrofoam container is more cost effective when your purchase size is larger. So without getting into thermodynamics of why it's going to be a continuous issue with direct to consumer frozen, this is why we try to work frozen through the retail channel and we've got really good supply chains to support that.

10:38
Daniel Scharff
I like that answer a lot. And it in the same way probably says what some of the E. Comm marketers would say of you need your average order value to be very high because you're going to have customer acquisition, your logistics cost is going to be really high. You need to be selling a lot in an actual order for this to have any chance of being successful. My guess is that it won't be if you're actually shipping frozen, unless you are Omaha Steaks. And even they run all those discounts and buy one get five free or whatever. So. But I don't know, I guess they figure out how to make it work for them, but it seems like it's hard to imagine this not being a losing proposition for anyone.

11:12
Daniel Scharff
And I would just say frozen and even things that are heavy, even that don't require all the ice, but maybe they're refrigerated or maybe they're just heavy products like beverage. It's going to be difficult. I think once you're a much bigger brand. Like I know Celsius can probably figure out how to make money off Amazon for example. But I mean just B2C in general, even stuff that's heavy is going to be tricky. One tip I'll give people as we work with a company called epg that gets you big savings off UPS rates. I use them personally anytime we're shipping our startup CPG gear around and literally I would get 70 to 80% off the UPS rate doing that. And we've had some brands start to use them. I think Ilavi told me they literally cried when they saw the difference.

11:54
Daniel Scharff
Cause they're like, we can finally make money on D2C now. So definitely check out EPG. We'll put a link in the show notes here also. Okay, next question for Jamie is from Brenda and she says I manufacture cookies. I'm looking to connect with wholesalers for a lot of the raw materials that I need, like unbleached flour and sugar, that kind of stuff. Where would you typically go to find all that stuff?

12:18
Jamie Valenti-Jordan
Sure. Especially as we're getting started, you really want to leverage your local ingredient distributors. So there are in fact local ingredient distributors all across the US Many of them with overlapping territories and things like that. And honestly in some cases they're very specific in the types of things they supply. For example, Valley Baking up here in Wisconsin supplies a lot of the baking supplies for all of our small bakeries all over. So the unbleached flour, the sugar, the salt, everything that you're going to need, they already bring in from the major require MOQ of a single truckload or something like that. They'll bring that into a warehouse and then they will downstack it and deliver you, in some cases two 50 pound bags off the back of their box truck whenever you call them and tell them you need them.

13:02
Jamie Valenti-Jordan
So yeah, definitely start there. They will be able to supply you with the information that you need from a traceability perspective to be able to use your product, your ingredients in making cookies that can then be shipped over state lines, so compliant with federal law.

13:16
Daniel Scharff
Okay, and if you're googling around trying to find those kind of people, what would you type in for search terms?

13:22
Jamie Valenti-Jordan
Honestly, I wouldn't. Local distributors don't always have a great web presence. Instead I would go to. Depending on where you live, you can either go into the bakery section of your local retailer and ask them who is the local distributor because they will know they're receiving shipments from them anyway. Or if you are a little further afield, go to your local bakery. If you are looking for bakery ingredients, certainly quote generic type things. That works even, especially if you're early on. Restaurant Depot is great to get started. It's not always going to give you the documentation that you need, but cool, great. Get started and get to making things so that you've got proof of concept.

14:01
Daniel Scharff
And on that vein, sometimes people ask in the slack also, hey, I, I'm doing formulation right now and there are a lot of ingredients I just need a tiny bit of. Is that a good approach for them? Again, just to go into Restaurant Depot, see what they can get there. I know you can usually get sales samples from some of these ingredient companies also, but not always. What do you guys typically do?

14:19
Jamie Valenti-Jordan
I mean, honestly, there's hardly a sample I can't get a hold of with a phone call. But that's because I am who I am, right? No, if you're new to this, definitely calling ingredient suppliers, having them sell you on how great their ingredients are and then turn around and say, great. Can I get a five pound sample of that? Sure, not a problem. Assuming that it's a generic type thing like a flour, if it is instead something like their highly proprietary protein blend of something or other. Yeah, they're not going to give you five pounds of that. They might give you 500 grams. Right. Which is one pound. So yeah, it's always worth asking. It is customary and typical that they would ask you to pay for the shipping yourself.

14:57
Jamie Valenti-Jordan
So having an account code ready to go with a FedEx or UPS or something like that, so you can just hand it to them, show up on your doorstep two days later.

15:03
Daniel Scharff
That's a good idea. Make yourself look legit. Like, yeah, sure, here's our number. We do this all the time. We're a big deal.

15:08
Jamie Valenti-Jordan
I love it.

15:09
Daniel Scharff
All right, we are ripping through these. Okay, here is the next one. And I've seen so many questions like this. So Maxwell said, hey, I'm building out my supply chain. It's a functional carbonated beverage. I'm trying to find a co man who can do all of this stuff. They need to have tunnel pasteurization.

15:26
Jamie Valenti-Jordan
They need to be able to do.

15:27
Daniel Scharff
My specific can size. They need to be low MOQs, low minimum order quantities, meaning startup friendly. They need to have some certifications and I really want them to be open to doing pilot runs as well. So this one comes up all the time and I'm always like, okay, I just want everyone to know out there. I mean, it's very tough to get things off the ground in this way. It may often not even be the same person who can do all these things for you. And if it is, it also probably may not be the right partner to grow with. But what do you tell people in this situation?

15:58
Jamie Valenti-Jordan
Honestly, some of these things are people that have spent a lot of time researching, and some of these things I've recognized have actually been AI generated as far as a list of requirements. So let's talk about this one in particular, because there's an interesting caveat here. So when we're talking about low moq, startup friendly, first of all, those are two separate things, startup friendly and low moq. We like to put them hand in hand. It basically means they're going to understand that I may not know everything and. And that they're going to be okay with that. Cool. Great. There's a lot of people that are willing to do that aren't necessarily, quote, startup friendly. There's also a lot of people like that who are not low moq.

16:33
Jamie Valenti-Jordan
But that said, the real thing I wanted to pick on here was low MOQ with tunnel pasteurization. So tunnel pasteurization, the way that it works is you take all of your product and you put it on a big white belt, and you put it and it runs on a conveyor through what is effectively a hot box. Right. It's got an opening on each end for the product to go in and the product to come out in order for it to cook and kill all the pathogens inside. Cool. Great. You can only start counting the time when the box is full. So what that means is that doing a low MOQ run through tunnel pasteurization often means that you need to run a whole bunch of extra product in there that has nothing to do with your products that they're just going to throw out.

17:17
Jamie Valenti-Jordan
Right. So they may be able to make you a thousand cans, but it may take 1500 cans to fill up the machine. So they're gonna have to run 2,000 cans regardless. Right. And so they're gonna have to throw out a thousand cans you're going to have to pay for anyway because of the size of what you want to pay for your moq. So you're gonna end up paying double for it. Like, there's a balance here between low MOQ and some of the process technologies that exist, and that's okay, but absolutely, when you talk about doing pilot runs and Process, authority, support, all that's really great. And it's what you need in order to commercialize your product. It is going to be challenging to find all of that in the same location because of the physical infrastructure necessary to do it.

17:55
Daniel Scharff
That makes sense. Because the people who are really good at doing that stuff, it's going to be just difficult for them to do it at a very small scale. They're probably not going to want to do it, but they're the ones who are going to have the best pricing as you get to be bigger as well, which you're also going to want. Because everything is hard to make money in this business. Right, right.

18:11
Jamie Valenti-Jordan
And I think that's one of the things we sometimes get tripped up on. It's very minor, quick little thing. When we talk about price per unit coming out of a contract manufacturer, they're not pricing it based on a unit, they're pricing it based on a shift. That's how they actually calculate their costs. Right. They have to pay people, they amortize their depreciation of their fiscal assets to a shiftwise run. They've got overhead, they have to pay that. They normalize as a cost adder to their shiftwise basis. At the end of the day, you're paying on a shiftwise basis for whatever they can produce. So the MOQ is really more of a representation of what can you produce in a shift, because that's where they can deliver the best cost.

18:49
Jamie Valenti-Jordan
So you can usually ask a co manager run below their MOQ for a very short length of time. Just knowing that you're going to pay a lot more for it. You may actually be negative margin out the door. Right?

19:00
Daniel Scharff
Yeah. You can ask them for a certain number of cans, something like that, and you'll just be paying a flat fee for the whole thing, which is not going to be your normal per can rate. So if you're okay with that, then great. When I ran a beverage company, we just hired a specific pilot facility to get our sales samples. You might feel like, oh, this is just such a good idea. I need to get our product out there and start selling it online. I think that's kind of a tough way to go. At least I'm more retail focused. Beverage in general is more retail focused.

19:28
Daniel Scharff
I like the approach more of just go and get those sales samples, which you can't actually sell, but you can use them to test them with retailers, take them to a trade show, get people to see if they want to actually order the product, at which case you might Be ready for a full minimum order run. But those were two separate places. Also, the pilot run actually let us test out the process a little bit and see if things were working well before going right to one of those bigger runs before getting on the highway, make sure all the wheels worked. So, yeah, we ended up working with the lab, which is part of Bev Source, just for that pilot run.

20:00
Daniel Scharff
I don't know what the fees are, honestly, but it feels to me like it'd be something like 5 or 10k to do a run of, let's say 500 cans, something like that, maybe a thousand. I think we got to do two different flavors, which was really helpful. And go on site and see it and taste it and make sure it was all working right. And they did a nice job. And that's a higher per unit cost than anyone wants to pay. But to get sales samples, it let me get them six months ahead of when I would be ready to actually do the run.

20:25
Daniel Scharff
And because the sales cycle is so long in this business where you need to be presenting it to retailers, get them to say yes, which then gets you set up in one of the distributors and that takes a couple months and then go and try and hit all the other accounts that have different review calendars, all that stuff. So I like that approach for just trying to get the thing made, pilot run quickly, run around town with your samples.

20:45
Jamie Valenti-Jordan
I love that you snuck that 201 level coursework there of like, hey, it's not about just getting a whole bunch of product into a warehouse and then starting the sales cycle because then you're going to be sitting on that inventory for quite some time. You can't walk into Whole Foods and start on Monday and start shipping on Friday. It's not the way the industry works. So good idea there on seeding into your sales plan a sales sample cycle that will allow you to circumvent that because that's. That's some high level business insights there.

21:15
Daniel Scharff
Thank you, Jamie. It always feels good coming from you. Last thing I'll say is one of the best hours I think that my CFO spent when I was running the beverage company was an hour with you, Jamie, where you agreed to just take him through how to reverse engineer a command's model. Because were trying to figure out how can we get some cost savings in here. And you just sat down with him like, look, this is exactly how they do the math. And if you create this model, talk about this model with them in this way, speaking their language, you will be Able to find savings together with them, trying to figure out the things that we're doing that are increasing their cost, how we could potentially bring those down. And it was just really effective.

21:50
Daniel Scharff
Any top two or three things that you think someone in any situation might learn from that kind of an exercise that would help them.

21:56
Jamie Valenti-Jordan
I think that's helpful to understand what like at a bare minimum, understand the fractional difference input costs between your ingredients, your packaging and the conversion of those ingredients and packaging into the finished product. Just sitting down and looking at that, I mean 40% of your conversion costs is usually direct labor, people working on the line. Everything else is stuff that you can't really touch when it comes down to it. So sometimes doing a little bit of work to make your product easier to handle so you don't have to open little half ounce jars of something and empty it into a larger vat, but instead empty a five gallon bucket, that can be a substantial cost savings in your cogs. But your co manager is executing what you told them to do.

22:41
Jamie Valenti-Jordan
So working with them to understand what headaches they have can help you bring that cost out, which is what we all want.

22:48
Daniel Scharff
And just a reminder, visit your coman, go there, see what they're doing, watch it actually happening. Maybe some people can visualize this stuff a lot better than I can. I have a very tough time understanding things without actually seeing it myself and asking questions. I love going on site to the CO man, just seeing how everything is laid out, how the product flows, where the things happen, especially when things go wrong, it's the best way to be able to talk to them about what might have happened. Don't you think?

23:14
Jamie Valenti-Jordan
Yeah, absolutely. I mean I think at the end of the day one of the things we have to remember is not only is our CO man not a black box, but instead our production partner, meaning a good portion of our business at its very core. The reverse is also true. The more they know about your product, about what it is you're trying to do, the better they are to execute it. They become as much a part of your brand as you become a part of their business. So I think there is a two way street there in understanding that relationship because you do have, I won't say non complimentary, you don't have common business models. This is not a transactional relationship. This is one where everybody's coming together, holding hands and trying to make a product that can sell to consumers.

23:59
Jamie Valenti-Jordan
So just remembering that and being a part of their production as much as they're a part of your Brand really helps out when stresses come in that relationship. And they will always come.

24:10
Daniel Scharff
Okay, so wrapping up the beverage topic. If anyone does actually need a good beverage coman for that early stage. If you're running, let's say after that, after you get your sales samples, if you're ready to run probably like 50,000 units per can. Per. Per SKU. Per run more than that. I have a couple good partners on the east and west coast. You guys can just send me a message if you want those contacts, but I've worked with them and they're great. Last question for you, Jamie, on today's Ask me anything comes from Annie. Annie says, I'm about to sign a co Packer contract and I would love to get a quick legal eye on it.

24:40
Daniel Scharff
So I know you're not a lawyer, Jamie, but you do have a lot of experience looking at these kind of contracts because you know everything that can go wrong and that has gone wrong from working with them. What's the key stuff that you're looking for in a contract?

24:54
Jamie Valenti-Jordan
All right, so let's start with the fact that when I do advising around this space, my goal is to help set up relationship that works for both parties, right? I'm not going to tell you indemnifications and blah, blah. Please. I'm going to start my conversation with always have a lawyer hired by you, engaged by you to review your contract in all situations. That said, you want to bring the lawyer in usually a little bit later. And I know lawyers will disagree with me. That's fine. My point is, you want to set up. What is the nature of the relationship that you and your co man want to have? Who's going to order the ingredients, who's going to order the packaging, who's scheduling the trucks? Where does this need to go and how long do they hold onto it?

25:40
Jamie Valenti-Jordan
What sorts of quality checks need to be done, et cetera, et cetera. There's a whole slew of things and honestly, even that sometimes can be customized based on your personal situation. So my point in all this is yes, it is important to have a quick legal eye on something at the end. Not the very end, but when you're finalizing the negotiations, you want to make sure that you're obviously compliant with the law. I don't do that. Instead, what I do is I make sure that you guys, neither one of you will ever see this contract ever again because you'll want to work together forever. Right? And so knowing what your responsibilities are as a brand and Knowing what the responsibilities are your are of your co packer and enumerating those in language helps to build a better long term relationship.

26:24
Jamie Valenti-Jordan
Especially because then you can build infrastructure around making that easier. If you're in charge of ordering ingredients, great. Then instead of having to make a phone call every single time to every single supplier for every single ingredient, you can instead start to put together, I mean, even just a templated email, hey, we're going to run X number of units. This is how many pounds we're going to need. Have it auto calculate so that a month before you're going to run with your command, that email goes out automatically. Right. And so things like that, you can build that infrastructure if you know what your responsibilities are supposed to be.

26:58
Jamie Valenti-Jordan
But if your co man's sitting around waiting for that last ingredient to show up and you're like, I don't know, it must be somewhere that's going to lead to a bad relationship in the long run.

27:06
Daniel Scharff
I like it. It's a great answer. It's sort of like it's good. You need that legal contract to set you off on the right foot. Everyone knows kind of what's going on, but if you really have to go back and refer to it a lot, probably something has gone very wrong. And in my experience, just that relationship is a way to. Okay, then they're not going to hold you to a lot of stuff in the contract because you're a good partner to them. And when you, even though they could theoretically really screw you because you didn't actually get the production date scheduled three months in advance, which is what is technically in the contract, they'll just be like, yeah, cool, we'll work around that. We will try to shift another client to a different day to accommodate you. Right. So just.

27:43
Daniel Scharff
And that's all based on the relationship. If you immediately were like, well, in the contract it says this, then probably you're going to just get the business end of that contract most of the time. So be nice to your co man, they are your partner.

27:53
Jamie Valenti-Jordan
And I will point out, and I think the vast majority of the lawyers in this space will agree, most of these never see a courtroom. So what you're doing by setting up these sort of responsibilities and remedies and things like that is really setting the stage for what becomes a horse trading exercise at the end of the relationship. Right. So what you're doing is dealing the cards and everybody keeps them face down until it comes time to actually have to worry about how to exit. And sometimes that is contentious. Where you owe them a half million dollars and you're trying to get your last product out there so that you can get them that money, but you're never going to run with them again because your margins are negative. Cool. You should have known that before, but cool.

28:33
Jamie Valenti-Jordan
Or even if it's something where you're actively antagonistic, that's. I've seen things where people start calling each other names.

28:41
Daniel Scharff
Which names? Just kidding.

28:44
Jamie Valenti-Jordan
We're gonna have to change the explicit tag on this one. No, but I mean, at the end of the day, this is really just setting the stage for later. Right. So what you want to do is give yourself a decent enough hand, but a fair hand so that they don't feel like they're going into the relationship behind the eight ball already.

29:01
Daniel Scharff
Do you feel like you do actually need to have your cards face down in a lot of these negotiations? My approach, honestly, a lot in life, is to try to have them face up the cards when you're playing. Just because I feel like it's a really good way to get to a mutually optimal outcome of just like, hey, here's what I've got. This is the stuff that's important to me. You have all the power. Coin. I'm just telling you, in this situation, I have no. I'm just really hoping that you will see this and you can help us out in this way. Is that, like, very naive to think about it that way? Are there places where that could really come back and bite you?

29:32
Jamie Valenti-Jordan
Not in that sense. The cards face down was more about. Everybody's going to ignore them until the time for horse trading should come, if it ever comes. No, but absolutely. I mean, being clear about where your business is and where things are going and when you've got a great lead with a Whole Foods region, that's great. They want to celebrate with you. Right. Share that. Even though you may not make any adjustments to the projections yet. Cool. At least comment on it so that they can feel like they're a part of your brand. Right. Again, that goes back to this relationship is really going to be helpful in the long run if you can build it to where they're excited for you, too.

30:11
Daniel Scharff
Like, you guys have all seen service providers out there. If they have some marquee client, I'm just making this one up. But, like, hey, we work with Graza and they'll use that in their marketing. It's great for them. Comands, I think, are the same way. Like, if they're able to tell people which a lot of times they aren't but if they are able to be like, yeah, we work with them, I mean, that's a cool attraction for them for a lot of new clients.

30:31
Jamie Valenti-Jordan
Right.

30:31
Daniel Scharff
Or does that never happen?

30:32
Jamie Valenti-Jordan
Yes and no. So most of them will not put a lot of that on their website just because if they ever lose that client, then they have to take all that off their website. But yeah, they'll almost always mention it in one of the first two phone calls of like, somebody else who's there, or sneak some sort of package in the background of a phone, of a video call or something like that they're not supposed to. You can almost always figure out who they're working with if you're intuitive enough. But I would say in general, it's not a. I mean, you can ask, but don't expect them to give you answer. They're really supposed to protect that confidentiality of who they're working with. Some don't care. Some individuals within contract manufacturing sites may be a little. Have a little more bravado than others.

31:17
Jamie Valenti-Jordan
I think we all know a few of those people in our lives and so they will brag about certain things that they're maybe not supposed to. But yeah, you can usually find something out and if you can't, that's maybe not a bad thing. But you should try to feel like how busy they are, so how often they move you off. And things like that actually will tell you it's an indicator of where their available capacity is. Right. And that'll tell you how hungry for new business they are.

31:41
Daniel Scharff
That makes sense. I once visited a CO man and yeah, they couldn't talk about any clients that they had, but they were giving us the tour. And I just got this whiff that is unmistakable of a very specific energy drink out there. And I just like, was like, it smells like this one brand in here. And they're like, whoa. I cannot confirm or deny that. But it's just so funny because the. Just the smell is so unique. That was a. That was a good one.

32:12
Jamie Valenti-Jordan
There's also another element there where you mentioned, go see your CO man. Absolutely. As part of going to see your CO man, you should know where your product's going to travel, meaning walking not only the line, but the warehouse. And if you walk the warehouse, you can read the side of the pallet and keep it to yourself, clearly, because you sign the NDA at the door. But also you'll know who they work with. Right.

32:34
Daniel Scharff
All right. So, Jamie, I think we got through most of the stuff that I wanted to cover today. I'm sure we will be back doing a bunch more of these in the future. But I want to thank you again and everybody. Jamie is very active in our Slack Channel. Just like swatting all these easy questions that we have that are just completely ruining our days and weeks and months. And for him this is just stuff that he's done a million times before and can answer in his sleep. So Jamie, thank you so much again from the community for having been our OPS MVP in the Slack Channel for five years now. So thank you so much for that. Any words to close on, keep the.

33:12
Jamie Valenti-Jordan
Questions coming even if you think they've been answered already. Honestly, a lot of the folks on the channel, and it's not just me, a lot of folks on the channel are really willing to help out and we don't mind answering the same question every week. So throw it out there and we will continue to help you out any way we can.

33:29
Daniel Scharff
All right, I will sing us out. Got a problem? We'll help in a pickle. Let us know if you're stuck. We're here. Don't you know you can ask us anything? Thanks everybody. Have a good one.

33:45
Jamie Valenti-Jordan
Thank you.

33:47
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 CPG Podcast page and click on right around 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 [e-mail] 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 super fantastic. Thank you everybody. See you next time.