In this episode, we meet Ronak Shah, founder and CEO of Obvi Obvi is a flavored collagen supplement brand doing ~$15M in annual revenue.
I started my career as an accountant at Deloitte. While I working there, I got the opportunity to work as a controller for a startup supplement brand. This led to a passion for startups and the health & wellness space. Then I started a CPG marketing agency. When I took the risk to start my own marketing agency, I told myself that I could always come back to accounting..
In 2019, we were 7 years into the agency and making 7 figures in revenue. We decided that we have made enough mistakes over the years and learned enough lessons to start our own brand. We chose the health and wellness category as we were already familiar with it, we then focused on finding out what needed disruption.
Obvi is a supplement brand for women, in the health and wellness category. We believed that flavored collagen can make collagen more exciting and fun. We hypothesized that if we make our branding for over-the-counter supplements more fun and exciting, tasty, and pink it would drive consumers to buy more healthy products.
As marketers, we had been in the DTC space for a while and we had a very good understanding of our digital consumers. We started Obvi on Shopify. Our first customers were from Facebook ads and built a pretty big business on the Facebook ads funnel.
It has changed everything. Overall, as a brand, we realized that it cannot live as a DTC-only brand. It changed the way we look at Facebook because Facebook is now just a place that we go to for overall awareness. If you visit our website, you will get multiple ads about where you can buy Obvi. We have learned that digital is a great place for discovery and awareness. Being able to offer your product omnichannel is now a blessing. It is a big opportunity to get blended customer acquisition costs down.
DTC still accounts for about 70% of our sales. Last year it was over 16 million sales, and from that 8-9 million came from DTC. We categorize the remaining 30-40% under B2B, which includes Amazon, The Vitamin Shoppe, and other retailers/boutiques. We also have OSPs, Online Selling Partners, like bodybuilding.com. We will be launching in Walmart in August. We did not have this broad of a distribution when we launched in 2019, and it has taken the market share away from the DTC business which has been cool to see.
First, we are working with a broker to define the roles and responsibilities. That is a new motion for us. Second, we are looking at how use digital marketing to drive offline sales. Being on the shelf at Walmart does not mean Obvi will necessarily sell through. We will be testing different strategies to support the launch.
We are keeping the product the same and rebranding the packaging to be much clearer on what it is. When a product is on the shelf, you don’t have a landing page or advertisement. This means the product packaging really needs to sell the product. We are dialing down on the flavored aspect and dialing up on why the customer needs Obvi and why Obvi is better than other options.
During the pitch meeting at Walmart, the Walmart team had a shelf and planogram. They took us to the shelf with all their collagen products including Vital Proteins and Ancient Nutrition. They grabbed the bottle of Obvi and asked us to explain why someone would pick up Obvi over the others.
I gave them a couple of key reasons. They then asked what else makes Obvi unique. To which, I added more reasons. They kept asking us for more reasons and I remember feeling nervous about running out of reasons. In the end, I had given seven differentiation points. They then told me that those would be seven reasons why we want this on our shelf. Being detailed and giving all the unique points helped us sell Obvi during this meeting.
I harassed a lot of people on LinkedIn. I even sent messages to people saying that I was flying in just to have a meeting with them. I sent a lot of messages on LinkedIn and eventually, I was connected to a broker who guided us through the process. For the initial reach, I did whatever I could to get connected.
Cannibalization of sales. All the channels have an online piece to them. Getting on vitaminshoppe.com instantly beat all our results myobvi.com hosted with Google since vitaminshoppe.com is a much more trusted domain. A small part of their business takes away a large part of ours. Diversification of marketing is the second challenge. The challenge is learning the new marketing tools, deciding what to use, and deciding how much you need to spend on these tools.
Coming back to a strategy that worked for us at The Vitamin Shoppe. What we did was we created a campaign where we said to upload a receipt of your purchase from the Vitamin Shoppe and as long as we scan it and see Vitamin Shoppe and Obvi on the receipt, we are going to give you $10 back as reward points to your account for your next purchase with Obvi.
This drove a ton of people to buy from Vitamin Shoppe. We also built an in-house scanning tool to read the receipt to add the rewards points to customer accounts. This drove a ton of offline sales and Vitamin Shoppe put in a second order within 4 weeks of the launch. We made sure to protect our online sales as well. The $10 credit received by the customer was in the form of gift card points which can only be used at myobvi.com.
Licensing deals. We did one with Entenmann's and it was a gate opener for a lot of conversations into B2B. If you create more authenticity through licensing through large collaborations, you’re going to create a lot more affinity to the brand, so for us when people say that we are a small brand, they were hesitant, but the minute we said we also collaborate with Entenmann's, they assumed we are a legit brand.
It’s a royalty deal. I have a three-year exclusive, and we pay them a royalty fee. For three years, I have the right to use any of their flavors, inside of my flavors, they only have to have the final sign-off on it. We are also talking to Arizona Iced Tea to do some iced tea flavors, tapping into these markets to bring authentic flavors helps us to connect with their branding and name as well.
Favorite omnichannel brand
Truff hot sauce
What is the thing you wish you could change about our industry
I wish more people would build in public
What inspired you to build in public
When I was looking for help, people were protective about what they knew, then I figured out what they did. If I was in their shoes, I would have helped and built a stronger relationship. I noticed how their growth plateaued and we surpassed some people's growth, so I feel like if you share, it comes back around.
Ari Murray’s Go-To-Millions
Favorite social media channel
Winning by Tim Grover
The favorite event you are planning on going to this year
C-Suite Mastermind from the DTC Newsletter
Where can our listeners connect with you?