The Month End Podcast
The Month End Podcast
Episode 26: Jeff Wiguna • Kuju Coffee
The Month End provides emerging inventory-based brands real life knowledge in the accounting, finance, and operational world. Our guests are not only similar brand founders and owners, but key stakeholders and contributors to the industry. Each episode provides a glimpse into the vast experience and insight from its guest’s unique background in a casual, conversational tone.
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In episode twenty six, Accountfully's CEO and Partner, Brad Ebenhoeh, sits down with Jeff Wiguna to talk about his outdoor-inspired pour over coffee company. Jeff provides some serious insight into developing brand equity to build a lasting, profitable company. Kuju’s unique position in both the outdoor market and food space provide some hefty lessons learned in leveraging vendor relationships, proper marketing, and proactive accounting practices for success. See how these unique facets all played a part in helping overcome a massive distributor challenge that could have easily ended any other small business.
SHOW NOTES and VIDEO RECORDING: https://www.accountfully.com/podcasts/jeff-wiguna-kuju-coffee
The Kuju Coffee Website: www.kujucoffee.com
For more small business and CPG- focused resources, visit Accountfully's resources page, where you will find helpful articles, guides, eBooks and more.
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Welcome to The Month End CPG community chat, The Month End will provide emerging CPG brands real life knowledge into the accounting, finance and operational worlds. Our guests will be key stakeholders from those same brands as well as other key contributors to the industry. Welcome to Episode 26 of The Month End podcast. Today's guest is Jeff Wiguna from Kuju Coffee. How you doing Jeff?
Jeff Wiguna:Hi Brad, thanks for having me.
Brad Ebenhoeh:Yeah, excited to chat about Kuju and your journey the last several years within the brand. So before we get started, just give a little background on yourself where you're at, you know, what, why did you get into CPG? And why did you launch Kuju?
Jeff Wiguna:Yeah, I'll start I've got a I've got two daughters. I'll say that first before the company that's always the kind of a top-of-mind thing. And I started the company with my brother before the first one was born. And it was a Kickstarter, I think back in 2015. So the brand story is Kuju was founded by two Eagle Scout brothers who got tired of instant coffee while camping and the Kickstarter in 2015...mind you at that time, outdoor was not a thing, and I remember a lot of people thought this was the most specific niche kind of idea you could ever come up with. And at the time, REI was only carrying Starbucks Via. So we did it. And, you know, we were just inspired by the idea of bridging a passion for the outdoors with the quality experiences of a great cup of coffee that was really compelling to us. And you fast forward. You know, a couple of years we debuted at Outdoor Retailer, which is the outdoor industries Expo West August of 2016. And shortly after that, literally the day after that, we got a vendor packet to the National Sportsman's Warehouse, which is a great hunting retail chain with about at the time 75 doors. And a couple of months later, we had a meeting with REI and we went into REI stores, I think May of next year in the following year. And from there, I guess you could say it all worked out from a distribution standpoint, today, we're in roughly 2,000 doors national and Whole Foods and Sprouts and REI, Academy Sports and all those places. But it's been quite the journey, as I'm sure a lot of your listeners can imagine. But But it all started with a passion for being outside with a really good cup of coffee and kind of the transformative impact that can have on your psyche, even if it's just for five minutes.
Brad Ebenhoeh:Again, I'm a coffee lover, I got three kids, if I can get up 10 minutes before them and enjoy a cup of Joe before. Before all hell breaks loose. Better, so good. Um, let's great background, I'm looking forward to chatting. So in terms of I guess , how long have you guys been in business?
Jeff Wiguna:This is probably our sixth year, depending on how you cut it. Six full year of operation. Yeah.
Brad Ebenhoeh:So then, I guess from a six year standpoint, you know, number one congrats on that, like, you know, three years, four years, five years, six years? That's all kind of good things to kind of celebrate. But how many different phases of the business? Like have you had?
Jeff Wiguna:That's an awesome question, actually. I would say, I mean, the last two and a half years was COVID. So that was like 2020 was a phase 21 is a phase now 2022 is a phase. I think prior to that, I'd probably say two or three phases. I think there was a Kickstarter to launch and first retailers, then there was figuring out to make sure we don't run out of inventory, just make stuff. And then I think the third phase was probably "okay, we can make a lot of stuff, let's start just continuing to sell like hell and market and, and that's probably phase three." And then phase four has been from 2020 on but that simultaneously been grappling with scale. We went national in Sprouts in February 2020. We went national in Whole Foods at the end of 2021. So there's been a lot of organizational learning, leadership learning on my in the last two, three years to set us up for the next five, six years, really. So I'd say maybe four or five stages.
Brad Ebenhoeh:Awesome. I think that's a, that makes a lot of sense. And it's always interesting to kind of reflect and look back on your business like in terms of, I guess the segmentation of different periods. Yeah, going to kind of first number one Kickstarter, like, like, how did that go? What did you learn? Like how do you take money in and then how do you earmark money for inventory and selling?
Jeff Wiguna:Yeah, you know, I we did the Kickstarter at a time when Kickstarters were very popular, and a lot of Kickstarters were not fulfilling on time. And so I was personally very sensitive about making sure we could get it done on time. And I think that's kind of an integrity value that just pervades into the way we do business now. Um, but they're most of the work was in the planning, like, what were the, what were the items? How much is that going to cost? How much do we need, so we didn't raise a ton, we only raised $16,000. We use it to fund the trip to a trade show to check it out, buy some preliminary equipment. But the real reason we did it was just to test our chops, quite honestly, just to see if we could even get it done. We didn't have any product, we had a prototype. But it was mostly a marketing and planning and supply chain exercise. So we fulfilled it on time, we had a little bit of extra money to use for other things. And it felt like a big challenge at the time, I was so tired after it that I said, "Hey, I don't know if I want to keep doing this after a Kickstarter." But, but we kept on going. And in retrospect, the Kickstarter looks like a nice little project now compared to the problems we deal with today. So this is kind of what that was, like.
Brad Ebenhoeh:Awesome. So then the next kind of step of national distribution, kind of at a young phase, your business, how did that go?
Jeff Wiguna:Well, the way it went on a production standpoint was generally fine, because I think production is a little more predictable than maybe sales forecasting, or buyer behavior predicting. So to put it really bluntly, we just worked our ass off to make sure to fulfill the National Sportsman's Warehouse order, we're still manufacturing in our living room. And for REI, we were not manufacturing in our living room, but an actual kind of office space, but still packing by hand. And we just put a lot of time into it, had part time workers doing it, and we shipped it out. I think it wasn't until we got a real good production line operations set up that the national stuff on Sprouts and Whole Foods started kicking in and getting involved with distributors and chargebacks and all that stuff when when you're that management has to be I don't know if it has to be tight-knit because I think it's pretty hard to keep it so tight-knit, given what it's like to work with these people. But I think we have to be very good with understanding. We had to be really good with understanding the risk mitigation and risk profiles of distribution production across the board. And that's something that we're kind of constantly in now, especially with the COVID things on pricing, inflation and supply chain so forth.
Brad Ebenhoeh:Yeah, well, let's get into that. Like how have you, how was your suppliers I guess number one, how has your product mix changed from like selling to the customer since inception. And then number two, what else has changed within that specific last couple years of COVID, supply chain, freight costs, etc. So number ones, I would like the product next year, the same product mix, you have a different product mix?,
Jeff Wiguna:We've been extremely focused. One of the things I was told when we first launched our first Expo West, which was March 2017, was just to be known for one thing. And for that, I've always kept this in kind of the back of my head just to be known as Camp coffee or outdoor coffee. And I think that's translated into a product mix that is almost basically the same as day one, today. We've we started with kind of our core set of three roasts, we launched our single origin line, which is the three additional roasts the year after. And we have not really played around with it since. We've had different packs, like gift packs, and we went national in World Market and Paper Source. But we've divested from that since. And at the grocery level. We're just focusing on three core SKUs, which is have been the core things from the very beginning. So not a lot of changes there. Yeah.
Brad Ebenhoeh:Good. Good. And then I guess from moving on to the next question of in terms of what has changed last couple years since COVID, related to costs, or supply chain or just managing the business; buying inventory sooner versus later, kind of operationally, supply chain aspect. Like what, what's changed, what's stayed the same?
Jeff Wiguna:Yeah. I think, well, one, we were not expecting to go national in Whole Foods. When we did that review, I actually had only pitched for maximum half of the regions and at the time, we were only in one region in NorCal. And it wasn't even the whole region. It was like 26 stores in NorCal out of like 40, 50. So I was sitting outside and I got this email from Whole Foods and I counted the DCs and the doors and and the list. It goes horizontally. And I was like, "holy cow this like wait, there's another column, and another column", and having been experienced enough at the time. This was probably a fourth fifth year. I wasn't ecstatic nor was I scared I was very level and realized this was going to be kind of a big thing. On a supply chain basis, I think we have a very strong supply chain and good relationships there. So it's definitely challenging, but not as much a source of risk. But, you know, the launch of Whole Foods, Whole Foods themselves were awesome. But I think there were definitely some kind of touched on it before some challenges with UNFI, on the amount of orders. And in particular, in this case, we had not gotten paid for multiple months, actually from UNFI. Even though we had done a national Whole Foods launch. And upon pursuit of this investigation, we found out that our POs were actually deleted from their system. I hope so I hope it was an accident. So the you know, I kind of paused because I, you, you see a lot of stuff when you're building a company from scratch, especially pioneering a category, but I never thought during one of the most critical launches, the POs would get deleted. So if we didn't pursue it, we likely would have never gotten paid. So this was months and months over time of just working on this, investigating with our shipping partners, where things are, escalating where we needed to. And I don't know. I'm happy to go into it, but it's just so such an effect so many components of the business that it was a good rite of passage, I think to understand, you learn different kinds of things when something like that happens. So
Brad Ebenhoeh:So let's get into that, you know, this is a podcast targeted towards the CPG brand owner. Some of them may not know, like even the logistics of UNFI, or distribution or whatever. So I guess step one, can you just explain the structure and then on UNFI Ke, and how that works from the front standpoint in the process? And then we can kind of go through the phases of what happened and how you reacted at that the end? What did you learn? So go ahead.
Jeff Wiguna:Yeah, well, at a basic level for anyone who might be more new to CPG, when you sell in particular to Whole So the number one just specific to this, like, is there anything Foods, or Sprouts, they have a distributor. So UNFI is the key distributor that Whole Foods works with. And Ke is the key distributor, Sprouts works with. And there are a lot of these DC is 10 to 15. And I don't know if it reaches 20 around the country, but you're essentially selling to the distributor. And then obviously, at this point, the distributor is selling to the the chain to Whole Foods. So we have a great relationship with both chains. But it's incredibly critical to maintain your distribution forecasting and cash flow monitoring with the distributors, because that's that that's what's paying your bills. I mean, the chain is giving you the chance, but your cash flow comes from the distributors. So to say that UNFI is the one that by mistake deleted, our POs is actually basically saying we had spent a lot of money on production. And over six to nine months, we were not getting anything back. And you say the least that was very challenging, but it affects it affects your priorities as a company because usually you want to be focused on the marketing at that point. But if you're dealing with cash flow challenges of that magnitude, you have to have ridiculously keen understanding of the levers of your business. So you know where to move things at certain times and so luckily, we got through it. But it was it was very difficult. You should probably ask me a specific question. Because my usually I can articulate very clearly, but this was such a unique situation. There are a lot of different components to this. that you could have done or somebody else a different, you know, CPG brand could have done to minimize that risk of the PO getting deleted before you ship the product? Or before you produce the product? Yeah, I think it's, it's the basic "watch your A/R time lines very meticulously". And the day that somebody is maybe one day late, don't be afraid to just say, "hey, we wanted to see if this is coming in, I think UNFI is not necessarily the best at responding. So second to that kind of matrixing urgency or importance of the A/R that you're following. And if you're not getting a response, understand if it's like a $400 order, it's okay. But if it's a$400,000 order, it's probably not okay, so I think we presume that payments would come in, because they have in the past when we were working with other DCs so we just assumed it would just take some time. That was probably not the best assumption. I think if we were more proactive about communication, we might have been able to get ahead of it.
Brad Ebenhoeh:Gotcha, good. And for the listeners out there, what do you mean by A/R is accounts receivable. So you enter an invoice on your end, a PO on their end is they're purchasing product from you, you invoice them, which is revenue and accounts receivable, and then basically maintaining and reviewing your accounts receivable and open invoices, just from an accounting standpoint. I urge all just businesses, small business owners, make sure you invoice on time and make sure you review your A/R at least weekly. And then feel free to follow up with people when you're past due. And sometimes you're like, well, they're gonna pay me I feel bad for following up. No. It's a contract. They owe you based upon terms, it doesn't always happen that way. But there's nothing wrong with you bugging them, whether you do it, your bookkeeper does it or whatever. So.
Jeff Wiguna:Ya, what, what we do now is, we did go over A/R weekly. But what we do now is go very specifically into A/R in particular larger POs just to know, because you might run into something where the distribution center, even if it's not UNFI, somebody else might just have labor problems. So they're processing inventory, slower effects, accounting, you just want to know all that stuff. And so it's essentially for an early CPG brand, I think it's it all rolls up into just cash flow management competencies, which I should say is very different from managing your P&L. And that's an important distinction, I think, you know, on the P&L basis, things can look that fabulous. And you won't feel that way on the cash flow if you don't pay attention,
Brad Ebenhoeh:That was actually my second question on this topic, like how did you manage cash like throughout that process? And then how did you figure out just to fumble and get through that-those several months, you know, periods of not getting paid while having already paid for your inventory and running the normal operations of your business?
Jeff Wiguna:Yeah, that's a great question. So one thing I think that's really unique about us is we are, even though we sell coffee, and it's a consumable, we're actually at heart, an outdoor company, and we have a lot of outdoor industry distribution. And the really good thing about that channel is it doesn't have a lot of the complexities that the grocery side has, across the board: margin, distributors, overhead. So we have a diversified set of business where that was helping us quite a bit, move forward. The second component of that is just watching cash on a weekly basis. And just asking the question, well, what do we need to make it through the next couple of weeks. And, and, I mean, this is maybe not super helpful, but figuring it out. So what I mean by figuring it out, are we didn't have a line of credit, with a bank vendor or finance vendor, whatever you call it. And we did some small additional raises on a convertible note that we had out with friends and family, which helped as well. And on top of that, I think you just want to be really resourceful with where you're putting the money. And sometimes you have to stop spending money where it's not returning at the time. But if you stop spending money, you need to know the levers of your business well enough that you understand the impact clearly. So I think, yeah, just understanding your business alone is, is very powerful. I think that's probably an understated thing. Understand what makes it tick, you know?
Brad Ebenhoeh:Yeah, no, I think, yeah, I think figuring it I agree. Yeah, absolutely. Yep. Good. out is a great term. It's very vague, but it's a when you understand your business, understand the mechanics of p&l, cash flow revenue, what do I need to spend this month to keep my business operable with, I was taking a step back and understanding all the solutions out there. And really, once you understand all that, that really helps out in terms of these these downturns because that's when you can be like, look at him like, Okay, I need $22,000 In next two weeks, versus like,"I need money". And so people come and say, "Well, how much do you need?" You're like, "I don't know". No, it's like, if you're very precise, and you know what's going on, then that's kind of - it's an easier problem to solve for. And I think that's kind of what you're getting to with what you're saying. So last thing, looking back, is there anything that you change or anything, you know, within that process of you wish you did or you didn't do?
Jeff Wiguna:Do you mean just kind of broadly speaking over the course of just having grown the business or just
Brad Ebenhoeh:know just specifically that example of the UNFI situation like after, once you hit like, once you got paid for those delayed POs, would you when you look back, you're like, Gosh, I wish you would have done that month one, or you just you think you handled as best as you can and you got through it?
Jeff Wiguna:No, I think we handled it in general quite, quite well. We handled it, and we moved forward. I think it's such it was a big thing. But it's not as big as your overarching momentum and strategy for the organization as a whole. And I would say it's not as big as just understanding the nature of the equity you want to build with your stakeholders and vendors, overall. I think our ability to get through it was and continues to be a testament, I think, to the strength of the relationships that we've built within our company's ecosystem. And so maybe the one thing I would say to anyone listening is product has to be good, operations has to be good, but but all your power and equity, and ultimately, long term growth and profits from a company usually happens long term. So you need to ask this question of"Are you building relationships that are investing into long term equity? and, narratives not transactional?", and I have found, we were only able to handle that, because the equity that we have with the relationships in the company, on both sides; with our buyers and our supply chain, are uniquely very strong, I don't think we could have handled it, if that was not the case.
Brad Ebenhoeh:Relationships the the key to life. So now kind of moving forward, just kind of getting a more financial kind of standpoint, like what KPIs from a financial standpoint, do you look at now, to run your business or to see the health of your business as well as how does that differ from what you used to look at it? Or does it differ? So I guess let's start out number one, like what are you looking at on a month-over-month basis from a more pure financial standpoint?
Jeff Wiguna:That's a great question. I think on a on a finance basis, I'm constantly paying attention these days to cost trends, logistics, and fulfillment being a key one, and also understanding our pricing strategy. Because obviously, I think the biggest impact you can make on your bottom line tends to be within your COGS or cost of sales. Actually, I think your marketing and everything can get managed. But if you want you know, if you can save one to 2% on your COGS, that translates pretty heavily I think if you're doing volume, so we we I think about that trajectory. The other thing I look at is actually the question of how do we look at our finances, not even so much what KPIs we look at, because you want to make sure the way you think about your financial KPIs is reflective of the unique value proposition and structure of your organization, I actually think that's relatively challenging. Because if you're looking at it in a very standard way, you're going to inevitably derive the types of KPIs that might be standard, which usually results in more standard behavior, more standard operating in value propositions into the marketplace. So I think being able to understand the uniqueness of your organization and product and have that pull through every component of the company, I think is really valuable. But that's a little bit. I think that's a little bit more of an advanced thing. So I understand our p&l and everything at an intuitive level at this point. But But that's kind of the that's how I think about it now, right now.
Brad Ebenhoeh:That's, that's interesting. It makes a lot of sense. Can you me kind of a breakdown of where you're selling your product today?
Jeff Wiguna:Yeah, the way we think about distribution is is really around where does our customer which is the outdoor enthusiast shop. So we're really focused on on Whole Foods and Sprouts and REI but we're also in a lot of other outdoor stores like Academy Sports in the South. Shields is a new retail partner during the Midwest, Cabela's, Bass Pro. A lot of those those types of those are types of places but those are a lot of the majority of places that we're pushing business right now. Awesome.
Brad Ebenhoeh:Well, this is this has been a great chat like it's always great getting specifically into a situation and just as a have, you know an accounting firm who targets CPG brands and I deal with all the sales calls. A lot of times when I'm talking to the folks, deduction management UNFI Ke nightmares get brought up. So it's very industry specific. Yeah, it's interesting, but it is I'm just kind of get ahead of the curve, understanding what you signed up for, managing it, managing cash as best as you can, and then moving on. So you know, very appreciative of the, the example and the situation that you discussed, and I think it'll be a great value add to that for the listeners out there. So
Jeff Wiguna:No, my pleasure to share. Thanks for having me.
Brad Ebenhoeh:All right. Before we get outta here, a couple of things, we got our typical kind of two questions that we asked ask all of our guests. Number one, what is one CPG industry do?
Jeff Wiguna:What is the CPG? Industry Do?
Brad Ebenhoeh:Do? So for any fellow brand owners? What was the one piece of advice to do?
Jeff Wiguna:Oh, not not what does the industry do - one piece of advice to do? I'd say stand for one thing. There's a lot of stuff out there, but you can only stand for one thing. And I would even say that is for the lifetime of the company, one thing and if you can own that thing, then you'll accompany equity with your brand. Even if the revenue is low brand equity and owning that one thing will eventually turn into sales. It's just the way it works.
Brad Ebenhoeh:Ya, I remember back 10, 15 years ago, when I was getting into the business world and entrepreneur world, I was trying to do like five things. And it's like, all of them sucked. So it's like focus on one. And then you know, it's like, really focused on it. And it really does help you grow that brand, or that equity. The way you're looking at so then the second question is, then what is one CPG? Industry don't? For for the folks out there?
Jeff Wiguna:I would say don't get distracted by all the press releases on LinkedIn.
Brad Ebenhoeh:Give us a little more background on that.
Jeff Wiguna:Yeah, sure. The CPG industry is has a very low barrier to entry, so anyone can create food, go to the farmers market and say, Hey, I'm in CPG. But I think it has a very high barrier to entry to profit driving enterprise and network capability. And a lot of the companies in the space tend to be venture capital backed and those incentives that accompany that as V/C backed has in the way they grow, market, leverage PR is not always necessarily indicative of the best ways to build a long standing profitable business. And so when I say ignore the the press releases on LinkedIn, it's really about if you understand your business supremely well, and understand the customers who are buying from your business and serving them. I just genuinely don't think any press release matters at that point. You can have a competitor and land on the front page of the Times. But I think you ask anyone who's had press. It's like a party like it was great that night. And then the next day, the sales didn't really uptick, but people thought I was cooler. That's what press is like to me. So don't get distracted by what you see, get focused on serving your customers and maintaining your margin. It's not sexy, but that's how you will make money. And that's how you serve more people over time.
Brad Ebenhoeh:Love it. That's a very unique don't. But I couldn't agree more on a that those kind of short term, like daily are here and there. Like"win moments". People know about Kuju or Accountfully. I'm out in the world. And the next day, the next day, it's back to work.
Jeff Wiguna:No, I think I could say it because because most of my CPG peers are V/C backed, we're not V/C backed. So if I had VCs on my board or something, I would obviously not be saying that, because it doesn't make sense. But I think we tackled growth on a very unique basis. So I kind of feel like I have a little bit more flexibility and kind of saying these things.
Brad Ebenhoeh:Awesome. Well, this was a great chat. Jeff, before we get out of here, give everybody where they can find Kuju. What do you got brewing? You know, with Kuju any new products anything, just give us a you know, your little 30 second elevator pitch on Kuju here.
Jeff Wiguna:I'd say you know, we make pour over coffee really easy. And just buy us at REI, Whole Foods, Sprouts. And if you like it, share it. Share us on Instagram, we'll take a look. We've got some new stuff coming out. I'm not going to comment on that just yet. But just keep on buying us, follow us on Instagram and you'll see and I trust we'll make you happy.
Brad Ebenhoeh:Awesome. Kujucoffee.com KU-JU out there. So again, Thanks, Jeff. I hope everybody enjoyed the conversation here. Really, really good example of a a bad situation with UNFI go wrong but turn it into a positive longterm. Jeff really enjoyed it. Episode 26 of The Month End, Jeff Wiguna from Kuju Coffe. Take care of Jeff.
Jeff Wiguna:Thank You Brad. See ya.
