Joe: On this episode of the "CBD University Podcast," innovation, communication, and collaboration all done in-house and all for our customers, distributors, and white label partners. They work together to help you stay ahead of the trends in the industry, plus big news about our podcast in the coming weeks you won't wanna miss. This is the "CBD University Podcast" and it starts right now.
I'm Joe Agostinelli, host of the "CBD University Podcast." And if you're a returning listener, I welcome you back to our podcast. If you are a new listener, we are glad you found us on your favorite podcast platform of choice. Don't forget, you can watch full video episodes of our podcast on the Global Widget YouTube channel and the YouTube channels of our brands, Hemp Bombs and Nature's Script. Don't forget to subscribe to our podcast wherever you get your podcasts. You'll get notifications each week when new episodes are published, plus you'll be all set for the next chapter of our podcast journey, which we'll have more details on later on, so you wanna be sure to listen until the end or tune into the end if you're watching. It's a constantly changing industry such as CBD and cannabis. It's hard for customers, distributors, and our private label partners to stay on top of everything, and that is why innovation, communication, and collaboration is paramount inside our 110,000 square foot facilities as our in-house formulation, compliance, quality control, customer service, marketing, sales, and private label teams all working together to ensure our customers, business partners all succeed together on our CBD health and wellness journey. Joining me once again on this podcast is our Vice President of Sales Vince Gillen, and Business Development Manager Clay Rahmberg. Welcome both of you back to our podcast.
Vince: Thanks for having us again, Joe.
Joe: Vince was with us not too long ago as we launched our first non-CBD brand, and Clay, part of our white label team, was with us back on episode 34. It's been a while so welcome back. Vince, let's first start off with you. We talk about the word "innovation" and you've been here almost since the beginning now, since...in 2016. Whether it's new products for our distribution partners, new brands, how does innovation help us stay on top of industry trends in order for retailers to maximize their sell-through?
Vince: Well, I think it starts with the feedback we get from our wholesale and distributor partners that tell us what's happening in at the store level, and they're going back to our formulation team with ideas and trying to come up with the right products to get out there, and sometimes there's...you have winners and sometimes you have losers, but I think the key is to always keep on moving forward and looking for that next new product and continue to innovate.
Joe: And in continuing to innovate, and you just actually have come off and we'll talk more about this, but you've just come off our first trade show now as we go, you know, back to in-person events, and obviously that looks a lot different than it did when you first got into the space. So what you see in the industry now, did you ever think of that when you first started here?
Vince: No, we actually just got back from the TPE show and it went great. It was in Vegas and the turnout was amazing. I mean, I was able to interact with probably some distributors that we haven't seen in three years that we've worked with over the phone, so it was neat. You know, coming out of COVID, everyone's out trying to see what's trending, what's new, and, I mean, it was everything from, you know, your standard CBD and cannabidiol products to now Kratom's getting really big, some of the CBN, CBG, Delta 8 products, so...and then obviously the immunity and different tobacco-type products were there as well. So it was a great show and I think as buyers are out there, they're just looking to see what's new as people are back in the retail space with things opening up.
Joe: And Clay, you were also in Vegas. And on the private label side, innovation plays a big part in allowing us to innovate new product offerings and also scaling to production quickly with product ability. How does the innovation play in on the private label side?
Clay: Yeah, absolutely. So one thing that we do well here, Joe, is we'll build brands and test the concept in the marketplace before we'll offer it up to a private label partner. So the process works a little bit differently with different customers. Again, the commitment to quality, the commitment to bringing new things to market here is unlike anything I've seen at another organization. So what we'll do on the wholesale side and what Vince and his team will do is we'll develop brands whether it be a CBD brand, a non-CBD brand. We'll test that product in the marketplace and then what we can do for our private label partners is provide them that sell-through data, those registered rings, and we can tell them what's selling well, what's selling well and where. As far as the innovation side, the scalability, we've made some huge investments, capital investments, into equipment, into personnel. Our formulations team for the contract manufacturing side has grown, as well as the wholesale side, has grown by 3x just in the past couple of months. So we've added a bunch of really high-level formulators to our team, all with different backgrounds, food science backgrounds, some specific to gummies, and they're working around the clock Monday through Thursday. Fridays they typically spend debriefing about new formulas for the following week, but they're working around the clock to bring new products to market, to reverse engineer some of these products for our customers. And then we've added I think it's 6 machines, or total what we're gonna have by the end of 2021, six high capacity machines from 1 a year ago. So we're....
Vince: Gummy machines.
Clay: Gummy machines. That's right. So we're making those capital investments to make sure that we're keeping up with our customers' demand.
Joe: And for more on those investments you can tune into the past couple of episodes. Episodes well teed up. I love it. Episode 75 featured members of our formulation team so you'll hear about the new formulation lab and what goes into some of that research and development when it comes to CBD health and wellness products. Again, that's episode 75. And then our most recent episode, episode 76, talked about how we are gummy central and a lot of that new technology and innovation that allows us to increase our capacity when it comes to gummy manufacturing and production. And Vince, we've talked about this on our podcast before, shifting from innovation, but that education piece, and the podcast, and this podcast, is just one of the ways we communicate with our customers and retail partners. But talk about the in-house teams, and it's a whole lot of them, as I mentioned on the intro, and the ongoing communication and collaboration that we provide to our retail and distribution partners.
Vince: Right. I think education is ongoing and there's so many different aspects of it. Like Clay mentioned with our formulation team, you know, as you develop new products, you have to explain what they are and what's in it, why those ingredients are in each product, a new SKU, and we have to communicate that outward. And then also I think, you know, from a marketing standpoint we have to learn what's gonna work next from the consumer standpoint as they go into the retail locations and how to explain it, talk price point. So that's all part of the education process. And also what we've had to learn to do is educate our distributors and retail partners on managing expectations because as you scale up, you know, timelines change and, you know, we have a lot of rollouts that we'll do with chains and it doesn't just happen overnight. So that's also part of our educating process is it's, hey, things take a little bit of time, formulations can go back and forth based on...especially some of the custom stuff, so we may run it and then send out samples and then get it back and make tweaks here and there. So education is definitely key to have any successful product in the retail space. So that's been a huge part. And, you know, from hiring, not just formulation but on the marketing side, production side, compliance, I mean, there's so many people that we've been able to bring on board recently that's really great for the organization.
Joe: Do you guys find...and just as we were talking about that, it made me think of this question, and you guys were both at the trade shows I mentioned, but do you guys find at the trade shows that there's a common theme to the questions that folks are asking when there's new products, you know, coming out to market?
Vince: Yeah. I mean, Clay can chime in on this, but when we first launched CBD it was what is CBD? What does it do? Why do people buy it? To where now it's, "Hey, I get it. This is what people are looking for." Especially on some of the new products like...particularly on the other hemp minor cannabinoids like Delta 8, CBG, CBN. So people already know what that is so the education piece is different. It's more educating on what's in it and why and then the price points. So yeah, that part has definitely shifted. And so many people are looking at alternative health products, like I said, not just from hemp but now kratom's getting big, so it's really...it's a lot different over the past, you know, four, five years.
Clay: I was gonna say there's just been a...I've noticed a change myself in that people aren't necessarily as price sensitive anymore. It's like Vince said. People know what CBD is. They know what it does. They're no longer shopping for the cheapest product out on the market. They're truly looking for something that's quality and they're looking for a supplier that can keep up with their demand as this industry becomes legitimized. And as we continue to get good news that there might be some FDA rulings, people are really looking for a partner that can scale with them, that can make sure they don't run out of stock, that can provide them with some sales data, that can provide them with that backing marketing support, that can provide them with things like CBD University and a platform to promote their brand on. They're really looking for a partner that's more dynamic than just offering something cheap, you know. So that's what I've seen. I've seen just a lack of price sensitivity and somebody looking for more of a partnership that they can grow with.
Vince: Yeah, that's a great point. I'd just add on to that I think a lot of the retailers working now too are thinking long-term not just short-term, and us as a manufacturer it's not like we just bring somebody Hemp Bombs. There's so much more we can bring to the table. You know, we may eventually get to the point where somebody's...the chains want their own products as well, that we'll be able to offer from the private label, white label standpoint and that's a true partnership.
Joe: And Clayton, with respect to our private label partners, that same communication and education comes in the way of our in-house creative team, everything from packaging to labelling, and then our in-house safety and compliance teams, because not only do we have to create top-selling products, but hey, they have to be as good as advertised.
Clay: They gotta be good, yeah. So we do offer a lot of support in that way. Most of the private label partners that we work with, they already have an established brand. What they're asking us to do is maybe they're experiencing supply chain issues with their current supplier. Maybe there's a quality issue. Maybe there's a communication issue. We find that we capitalize on all of those weak points where some of our other competitors might fail. And what we view this as is when we take on a brand, we see it as our own brand, because the success of our partners is our success as well. So it's really a two-way street. And what we offer as far as packaging is we have senior product managers that will take in that packaging, they'll review it for compliance. And what these partners find is that there's a lot of stuff that they may have overlooked that we're able to provide because we do make those investments into compliance persons, we do make those investments into quality persons. And so we do provide a lot of support to make sure that not only is your product quality, that what's on the package is actually what's inside the bottle, and that's again goes back to this price sensitivity where people aren't looking for something cheap. They're willing to pay money to get that backend support, to know that what they're selling is safe, to know that what their clients are taking, they're actually getting what they're asking for. So again, we treat it like a true partnership and if we're selling a private label partner a product, we treat it as our own, and we would hope that other people are doing the same thing, and that they can appreciate that level of service, so...
Joe: And on the retail distribution side, I mean, same thing with that. I mean, people who are selling our products in their chains and their stores wanna know and make sure that, "Hey, is this compliant with my state?" You know, we talked about the different states that have now come on board with guidelines.
Vince: Yeah, everything is still...especially when it comes to the CBD and hemp products, it's all state-by-state regulated, so things still change weekly, sometimes daily I feel like, but having that level of expertise, and I think being able to provide accurate information quickly to the retailers and distributors is key, and we're very, very good at doing that. So...and I think that's gonna be ongoing and that is part of the partnership. We can share that information with the whole...the private label and white label customers as well, and I think...I just wanna add this is that some of the companies that we're making their product for at one time used to be competitors, and now that we're able to kind of see what they're doing, there's a lot of collaboration to where we can say, "Hey, this is why we had success at this," and then you start looking at it, it's not the success of the brand, it's success of the industry as a whole from hemp. And that's been really pretty eye-opening for us and an awesome experience so far.
Joe: And that takes collaboration to a total whole another level.
Clay: Oh, it does, yeah. And it's also funny too because a lot of companies that are not in gummies currently, we now see are getting into functional gummies, into cognitive focus gummies, and again, we're developing all these on the backend through our own in-house brands but we're seeing things grow like caffeine gummies. We're seeing stress relief gummies as people get back out and start working from the office or start mingling with people. You've been locked down for a year, people might be, you know, stressed out. So we're seeing a lot of stress gummies, a lot of sleep gummies, cognitive focus again as I mentioned, but companies that aren't in the gummy space are now seeing that...and I don't know if this had been mentioned before so I apologize if I'm making a redundant statement, but the gummy market right now I believe is a $4.5 billion market. I'm sure the listeners can check me on my numbers, but it's about a $4.5 billion market. That market is set to double in the next three to five years and people see that growth in cognitive gummies and in functional gummies. So we're willing to help these customers bring something to market with the data we have on what sells well. And that's something that...we've been gummies for quite sometime so we can provide this data to customers and let them know what we think they'll be successful with.
Joe: Well, Vince, Clay, I think we covered just about everything and then some. So I really enjoyed the conversation with you guys. Thank you so much.
Clay: Seventy seven, man, congratulations, Joe.
Joe: Seventy seven.
Clay: Congratulations to you, by the way.
Joe: Seventy seven episodes. It's all about the guests.
Clay: How many downloads now?
Joe: We're up over 82,000 as of the time of this recording.
Clay: Amazing, amazing.
Joe: Hopefully by the time that this podcast runs, we'll be over 85,000 and then we'll start approaching 100,000. But that's actually a great segue into, you know, don't forget to subscribe to our podcast wherever you get your podcasts. You'll receive push notifications when new episodes are published. And when it comes to evolution, not only do our product offerings, brands, and businesses involve but so...evolve, excuse me, but so does our podcast, and now we've been with you for 77 episodes since November of 2019, more than 85,000 downloads of this very podcast and thousands of video views across our YouTube channels, and now episode 78 will be unlike any other. Tune in next week as we evolve into the next chapter. You'll get all the industry news, trends, and learn even more about our continued innovation and evolution into an industry leader in the CBD health and wellness space. We'll have a new name, but don't worry, you'll still find our podcast in the same place that you have found our podcast each week on your favorite podcast platform and on the Global Widget YouTube channel. So be on the lookout for episode 78 as our evolution enters a new universe. I'm Joe Agostinelli, host of the "CBD University Podcast." Thanks for tuning in.
These statements have not been evaluated by the Food and Drug Administration. The CBD products are not intended to treat, cure, or prevent any disease or condition. Always consult your personal physician about CBD and using CBD products. CBD should never be used by anyone under the age of 18. This content is not intended to provide legal advice regarding the legal status of CBD and CBD products.